The Electronic Transaction Levy (E-Levy) controversy has been raging for some time now and this is sapping the energy of the nation. Because of E-Levy everything seems to be at a standstill in the country with no end in sight.
With the ruling party, the New Patriotic Party (NPP), bent on implementing the levy while the opposition party, the National Democratic Congress (NDC) is against its implementation, the forward and backward movement of the two dominant forces in our political dispensation is holding the whole nation to ransom.
Some Minority members in Parliament including the Minority Leader, Haruna Iddrisu, are at the Supreme Court on contesting the passage of the levy by Parliament.
Time to move on
To put it bluntly, it is time to move on as nation. All that the citizens want is accelerated national development and if E-Levy will guarantee and provide that so be it, but if it fails to do so, the consequences will be the headache of the NPP in future elections.
There is no denying the fact that throughout the world nobody smiles paying taxes. It is even worse when you hardly see what your taxes are used for while you continue to live in abject poverty and filthy environment with basic needs lacking.
Equally, the truth of the matter is also that no government, anywhere in the world, can survive without taxation. For this reason, all governments across the globe try to find smart and innovative ways of taxing its citizens for national development.
In many of the cases, the introduction of new taxes are not easily accepted and governments have to bulldoze their way to get it done.
Multiplicative vs convenience tax
So is the E-Levy, which is coming into effect next month after approval by Parliament and the President assenting to it thereafter. Though the levy has since been revised from 1.75 per cent to 1.5 per cent on all electronic transactions, media reports suggest that following its passage last week, some Ghanaians are withdrawing their monies from their mobile money wallets. This is because they believe it is a multiplicative tax as against convenience.
Prior to the passage of the levy, the nation found itself at the crossroad on whether to approve or disapprove the Levy which is a tax imposed on electronic transfers charged at the time of transfer.
Cost to everything
In life, there is a cost to everything. All choices have consequences and so it is the E-Levy.
As a nation, we have beaten ourselves for far too long all because of E-Levy. In the name of E-Levy we seem to be delaying the country's progress dragging it to nowhere.
Is E-Levy like Value Added Tax, which was introduced more than two decades ago in the country, a tax component whose time has also come?
Be it as it may, I believe its usefulness and appreciation will be a matter of time.
As a convenience or multiplicative tax, I do not have any doubt at all that its payment will be and must be a matter of choice.
Already some people against its payment are said to be deleting their momo account and will prefer to engage in physical visible transactions. What that means is that whatever monetary transactions they engage in they must be physically present to execute. They prefer to go through all the inconvenience to avoid the E- Levy option so they can save some monies for other use.
As a convenience tax however, others trust that the levy offers a number of gains including saving of time, help widen the tax net and also afford Ghanaians the opportunity to contribute to nation building as well as reduce dependence on debt and borrowing. It is also to increase domestic tax mobilisation due to the country’s low tax-per-GDP ratio compared to its peers and other developing nations.
But in all of this, one vital step lacking in the whole E-Levy controversy is effective public tax education. Many people do not know the rational for the E-Levy and its benefit.
Yes, the Finance Minister and some senior government officials embarked on some education campaign, but this was at the eleventh hour and there is still much more to be done to intensify public education on the matter.
This is a country where many people do not like paying tax. According to tax experts, out of about 18 million potential income taxpayers, only 2.4 million persons (approximately eight per cent of the total population) are registered as personal income taxpayers as of August 2021. Furthermore, only 45,109 entities are registered as corporate taxpayers while 54,364 persons are registered as self-employed taxpayers at the Ghana Revenue Authority.
There are also about 17 million registered voters and about 19 million active mobile money accounts. In using the 17 million registered voters or the 19 million mobile money accounts as a proxy for Ghanaians that are of adult age and economically active, and comparing it to the 2.4 million Ghanaians who pay income tax, we are confronted with the stark reality that the structure of our economy is quite informal, unlike the western economies, and as such, the traditional tax handles, like the personal income tax, may not be as effective in raising the required revenue so reports the revenue authority.
That is why it is so critical to intensify public education on taxation.
There are still doubts on the minds of many Ghanaians who are justifiably wondering whether this E-Levy tax will be put to good use.
You hear some of the arguments put forward by some E-Levy opposers and you can immediately see a disconnect.
That is why continuous education is so critical at this stage where the E-Levy is now a law ready for implementation next month, May to be precise.
Another worrying concern is what the monies accrued from the E-Levy will be used for and how accountable will be the process.
I am aware some of the proceeds from the E-Levy will be used to tackle the hydra headed challenges of youth unemployment, inadequate and poor physical and digital infrastructure, including in particular, roads as well as rising public debt, and the diminishing entrepreneurship culture of Ghanaians.
Will it be too much asking for E-Levy Projects? For transparency and accountable governance, this will certainly assure the nation and engender trust and confidence in the whole process.
All developed nations are where they are through taxes. But more importantly their citizens know exactly how their taxes are put to use. There are clearly defined development projects and once started, are always completed and on schedule. Because the projects are all well thought through, implementation plan carefully developed there is always uninterrupted execution. Ultimately the citizens’ interest are largely satisfied. So must it be for the E-Levy.