The contradictions: What Roads Minister and Deputy Finance Minister said about govt’s plans for E-Levy

The government of Ghana through Ken Ofori-Atta, the Finance Minister announced an introduction of an Electronic Transaction Levy, E-Levy, during the presentation of the 2022 budget statement in Parliament.

E-Levy among other things is to “widen the tax net and rope in the informal sector.”

The proposed Levy, which was expected to come into effect in January, 2022, charges 1.75% on the value of electronic transactions.

It covers mobile money payments, bank transfers, merchant payments, and inward remittances. There is an exemption for transactions up to GH¢100 per day.

Although the government has argued that it is an innovative way to generate revenue, scores of citizens and stakeholders have expressed varied sentiments on its appropriateness, with many standing firmly against it.

Even though others have argued in support of the Levy, a section of the populace believe that the 1.75% E-levy is an insensitive tax policy that will deepen the already prevailing hardship in the country.

But what is the government’s plans for the proceeds that will be generated from the controversial E-Levy?

Two ministers of state, the Roads and Highways Minister and the Deputy Finance Minister, have given contrary indications of the government’s plans for proceeds from the proposed Electronic Transaction (E-levy).

John Kumah, Deputy Finance Minister, addressing the inaugural ceremony of the Ashanti Regional Youth Parliament on March 2, stated that the revenue from the E-Levy will not be used as collateral for the government’s debt.

According to him, the revenue generated from E-Levy will be a game-changer in the government’s quest to address the infrastructural deficit in the country.

“We need revenue to construct roads. We have a huge infrastructural gap in our country. The road tolls were giving the country 78 million cedis annually.

“The e-levy was going to give about 6.9 billion cedis. If Ghana was going to set aside 1.5 billion cedis from the e-levy to construct roads. It means there is an increase in capacity. Therefore, it’s untrue the E-levy will be used as collateral,” Kumah explained.

He, therefore, dismissed the assertions that government will not be able to pay the salaries of public sector workers in some months to come.

In contrast, Kwasi Amoako-Attah, Roads and Highways Minister, told the MPs on Friday, March 4, that the government of Ghana will securitise revenue to be generated from the Electronic Transactions Levy (E-levy) to raise bonds for road construction.

On the floor of Parliament, the minister emphasised that the Akufo-Addo led government is looking forward to the immediate passage of the E-Levy bill so that, it will be able to accelerate the country’s revenue collection drive.

Amoako-Attah was speaking to an urgent question from the Minority, on how his outfit is faring, following the abolishing of the road toll.

He explained, “the government, in its wisdom, has proposed the passage of the E-levy to bring in more revenue to build the road infrastructure of our country for all of us.

“Government is looking forward to the passage of the E-Levy that will bring in greater revenue that will be securitised and then used to raise a bond if possible, to build the road sector infrastructure.”

Meanwhile, Ken Ofori-Atta, Finance Minister, together with Kojo Oppong-Nkrumah, Information Minister, continues to seek support for the Bill which is currently pending before the MPs.