Kwame Pianim, a renowned economist has said the introduction of the E-Levy in the 2022 Budget Statement is a lazy approach of mobilising revenue.
On Wednesday (17 November) the Minister for Finance, Ken Ofori-Atta, announced the E-Levy, a 1.75% tax on mobile money and other electronic transactions, as a measure to “rope the informal sector into the tax net”.
However, speaking in an interview on Asaase Radio Thursday (16 December), Pianim said the policy is backward and anti-technology.
“First of all, I think it is a very backward step. The mobile money has brought financial inclusion to people in the villages who cannot go to the bank and open a bank account. You know what MTN and others are doing, they go to the bank and open an E-wallet for you, we don’t control it they do, they count it as if it is their money, it is not their money.
“A little bit more consultation would have shown government that don’t go there. You want to raise six billion? Is six billion worth undermining the digitalisation effort that this government has put in digitalising things?” the economist asked.
He added: “It is a lazy way of sitting in the air condition in Ministry of Finance and say ‘oh I want money, oh let me grab this.’ The Ministry of Finance is not a budget and expenditure ministry, it is for development, it is for finance. So you are looking at what will grow the economy not what will give you money…”
Pianim called on the government to rather cut down on its expenditure and find other innovative ways of raising revenue.
Source: asaaseradio.com
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Ironically, Mr Pianim couldn't propose any tax system as an alternative. Just rubbishing this rather smart way of catching all the tailors, masons, online business and underground businesses into the tax net is not enough . Propose the alternative that will generate the GHS 6billion and stop saying 'innovative way'.
Mr Pianim this kind of statements will diminish your your reputation.You are one of the best economist Ghana has had,silent is golden, you have e very right to speak about national issues but this one you got it wrong. Which of your taxes do we use arms to collect it?.The world is moving in a new direction and these kind of ways in collecting taxes in force everywhere in the word.
PIANIM YOU SPEAK YOUR MIND
The Bank of Ghana stacted that the electronic money transaction in 2020 is valued $500.00 billion. If the poor in the country are able to generate this huge amount, what will be the contribution of the rich. There will be a cost to the nation of the plan to tax electronic transactions. The sector will lose some its shine but altogether the government may be able to rope in some of the real businesses that dodge our porous tax system. Mr. Pianim may be remindered the days of his starring role at Senchi is past.
Mr. Kawme, the textbook you used during your days in the Univesity as an economist has expired and I advise that you look for a modern one and it will edicate and advice you and everyone thinking like you that the world is changing and most govts around the world have changed and are all using the e-tax/levy systems. If youwant to know more come to Malaysi, Singapore, Indonesia, Japan and Korea and you will know that your senses has expired in economies. I was thinking as you condemn the e-levy you will suggest another better alternatives but you offered nothing useful meaning you have nothing in mind except to talk empty , please leave the new brain policy makers to change Ghana for our chindren and your grandchildren.
Mr. Pianim, you really understand governance! 1.75 will in actual fact result in 3.5% when you want the receiver to receive actual monies sent. Economists are always saying they want to rope in more tax payers. Have they researched into how many people in Ghana receive above the taxable income of 500 cedis plus? The minimum wage in Ghana is even less than 400 cedis in Ghana, and we know that approximately 80% of Ghanaians don't receive 500 cedis monthly. A very large number of Ghanaians receive between 300 and 400 a month. Government must therefore think of a better plan of roping in more tax payers. Where are the tax payers? Only about 20% of Ghanaians receive a take home pay of 500+. Government must first think about how the minimum wage will rise up to 1000.00 cedis a month. A nation prospers when the majority lives on a living wage, not when government has billions in its account to sponsor infrastructure. Secondly, this move to charge e-transactions is just backward, insensitive to the poor, and a stab to the back of the scientific world that introduced e-transactions to ease the burden of humanity. Government must listen to Pianim and cut down public expenditure, and also do what they are appointed to do - that is think well and plan
Kwame Pianin is an economist but does not understand issues at stake. Where is his research evidence that e-levy will erode the benefits of digitisation? Systematic economic evidence indicates that consumers are rational and take decisions based on costs and benefits analysis. Ghanaians would not pay tax and our enforcement system is plagued with corruption. E-levy is an innovation that will bring efficiency and needed revenue given the strength Ghanaians can go to dodge paying tax. The only thing required is for the Finance ministry to ensure that the very poor are not affected. The poor must pay his/her fair share. The costs associated with cash transactions are huge for rational consumers to go back. Mr Pianin - you are speculating without evidence.