President Nana Addo Dankwa Akufo-Addo has reiterated the need to introduce the Electronic Levy (E-levy).
According to him, the 1.5% levy is a mitigating measure to recover from the impact of Covid-19 on the economy.
Acknowledging difficulties faced by countries worldwide, he noted that Ghana was not an exception.
“The digital economy, the mobile economy, is emerging as the biggest economy in the country and has not had any taxation at all for a long period. So it is important now that they also come into the net.”
“Our country has one of the lowest tax to GDP ratios of any country in West Africa and of an equivalent economy. The Ecowas area, the general average, today, tax to GDP average is about 18%. Ghana we are 13%, so if you’re talking about a country, which is already overtaxed, if anything at all, it’s undertaxed,” he explained.
The E-levy is a tax applied on transactions made on electronic or digital platforms. The Minister for Finance announced in parliament the intention to implement the bill where 1.75% will be taxed on all digital transactions during the presentation of the 2022 budget.
The E-Levy is expected to generate an estimated amount of GH¢ 6,96 billion in 2022, GH¢7.89 billion in 2023, GH¢8.92 billion in 2024 and GH¢10.09 billion in 2025.
It is also one of the measures to increase the country’s tax to Gross Domestic Product (GDP) ratio from 13 per cent to 16 per cent.
The E levy will take effect in May 2022.
Responding to critics who say the levy is insensitive as it seeks to further impoverish the vulnerable, the president said:
“There is no country in the world that is escaping the ravages of both Covid-19 and also the impact of the Ukraine [invasion] but what you need to look at, where are the elements being put on the ground that look beyond the Covid and beyond the Russian Ukraine war? I think that you will find that in Ghana.”
He insists, Ghana’s recovery program is trustworthy as it allows the country the opportunity to come out with a stronger economy.
The president insisted that Ghana’s economy was better off than many others.
“Well, not terribly,I don’t know an economy in the world that is doing well, tell me? Where you are here, [London], the highest inflation.”
“Let’s situate ourselves correctly. The world is going through very difficult times. Ghana is no exception. Nigeria is no exception. There is no country in the world that is escaping the ravages of both Covid-19 and also the impact of the Ukraine [war] but what you need to look at, where are the elements being put on the ground that look beyond the Covid and the Russian Ukraine war?” he told BBC in an interview.