The Minority in Parliament has filed a suit at the Supreme Court, challenging the passage of the Electronic Levy (E-levy) Bill by Parliament.
The suit has Minority Leader Haruna Iddrisu, Bawku Central MP Mahama Ayariga and North Tongu MP Samuel Okudzeto Ablakwa, listed as plaintiff.
Together, they want the court to declare the passage of the E-levy as unconstitutional and therefore null and void.
It is their case that Parliament did not have the right quorum to pass the E-levy as stipulated under Article 104 (1) of the 1992 Constitution which had recently been interpreted by the Supreme Court.
According to them, at the time the second reading for the passage of the E-Levy was done, there were only 136 MPs present in Parliament instead of the required 138.
Parliament on Tuesday, March 29, approved the policy without the participation of the National Democratic Congress (NDC) MPs, after they staged a walkout during the E-levy debate.
Reliefs being sought are;
a. A declaration that on the authority of the Supreme Court case of Justice Abdulai v. Attorney-General, Writ No. J1/07/2022 dated 9 March, 2022, the constitutional quorum number for decision-making and voting within the meaning of Article 104 (1) of the 1992 Constitution is 138 Members of Parliament out of the 275 Members of Parliament and not 137 Members of Parliament.
b. A declaration that on a true and proper interpretation of articles 2(1)(b) and 104(1) of the 1992 Constitution of Ghana, there was no quorum to enable the 137 Members of Parliament of the Majority Caucus present in Parliament on 29 March, 2022 to pass the Electronic Transactions Levy (‘’E-Levy’’).
c. A declaration that on a true and proper interpretation of Article 104(1) of the 1992 Constitution of Ghana, the passing of the Electronic Transactions Levy (‘’E-Levy’’) by the 137 Members of Parliament of the Majority Caucus present in Parliament on the 29th March 2022 without the requisite quorum number of 138 Members of Parliament present in Parliament, is null and void and of no legal effect.
d. An order of the Honourable Court setting aside the passing of the Electronic Transactions Levy (‘’E-Levy’’) by the 137 Members of Parliament of the Majority Caucus present in Parliament on the 29 March, 2022 as a nullity.
e. Any other order(s) the Honourable Court may deem fit.
What is the E-levy?
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.
According to Mr Ofori-Atta, the E-Levy will not be applicable for the following:
- Cumulative transfers of GHC100 per day made by the same person.
- Transfers between accounts owned by the same person.
- Transfers for the payment of taxes, fees and charges on the Ghana.gov platform
- Electronic clearing of cheques.
- Specified merchant payments (that is, payments to commercial establishments registered with the GRA for income tax and VAT purposes).
- Transfers between principal, master agent and agent’s accounts.
On the other hand, the E-Levy will be charged fully on the following:
- Mobile money transfers between accounts on the same electronic money issuer (EMI).
- Mobile money transfers from an account on one EMI to a recipient on another EMI.
- Transfers from bank accounts to mobile money accounts.
- Transfer from mobile money accounts to bank accounts.
- Bank transfers on a digital platform or application which originate from a bank account belonging to an individual to another individual.
The levy had divided parliament, with the Majority pushing for approval while the Minority kicked against it.
There was a split vote of 12 for each side at parliament’s finance committee until the chairman cast the decisive vote favouring the proposal.
The Chamber turned chaotic as MPs pushed, shoved and punched each other during the heated exchanges that many observers have since condemned.
This was after the Speaker of Parliament Alban Bagbin, had left and delegated the First Deputy Speaker, Joe Osei Owusu, to take over proceedings.
The Minority had said it would do all it could to ensure that the bill did not see the light of day, insisting it was not in the best interest of Ghanaians.
Discussions on the proposed levy
Since the announcement by the minister in parliament last year, the tax has faced strong rejection, with tax experts describing it as harsh, considering the economic situation in the country, but the government insisted it would pass it.
The Ghana National Chamber of Commerce and Industry (GNCCI) called on the government to reconsider imposing a 1.75% levy on mobile money and other electronic transactions in the country.
The Chamber maintained that the proposed levy would further worsen the plight of businesses, particularly small and medium enterprises (SMEs), which were mainly growth-driven and susceptible to economic and market cycles.
GNCCI said to increase revenue, the government should rather focus on finding innovative ways of widening the tax net, ensuring tax compliance, as well as addressing the rising levels of tax exemptions which did not commensurate with business growth.
Investment banking firm C-nergy Ghana Limited joined the chorus in admonishing the government to review the proposed Electronic Transaction Levy.
Even though C-nergy was not entirely opposed to the levy, they believed that “the 1.75% E-Transactions levy rate is high”.
Analysts from the firm believed that the scope and coverage of the levy were wide enough to generate the targeted revenues “if it is monitored and managed effectively”.
For Speaker of Parliament Alban Bagbin, the approval of the E-levy will spell doom for the governing NPP in the 2024 elections.
“It is very clear that if this your E-Levy goes through, you (NPP) have lost the election,” he said during a speech at a meeting with former legislators on Thursday, 23 December 2021.