Professor Godfred Alufar Bokpin, a Financial Economist at the University of Ghana (UG) has asked the government to scrap the controversial Electronic Transfer Levy (E-levy), describing it as "conceptually wrong".
The ruling administration introduced E-levy in May 2022 imposing a levy of 1.5% on electronic transfers.
The levy was "to enhance domestic tax mobilization and expand the tax base and provide an opportunity for everyone to contribute towards national development".
The initial rate proposed by the government was 1.75% but it was revised downward to 1.5% after strong opposition.
The levy has however not generated the expected results as some who are still against it find ways of dodging its payment.
Revision in budget
Subsequently, the government in its 2023 budget statement disclosed the rate has been revised again from 1.5% to 1%.
This, according to the government, will allow more Ghanaians to use the service.
“Review the E-Levy Act and more specifically, reduce the headline rate from 1.5% to 1% of the transaction value as well as removal of the daily threshold,” Finance Minister, Ken Ofori-Atta said.
Meanwhile, the ghc100 threshold has been removed.
Taxation is not a hammer
Prof Bokpin speaking to this in an interview on Peace FM's morning show 'Kokrokoo' said when a policy is "conceptually wrong" it will be opposed no matter how it is revised.
"Government should delete it (e-levy). When something is conceptually wrong and it doesn’t meet certain basic principles of taxation, people have issues with it; even if it's 0.1% . . . CSOs, Private sector said all that they could say about e-levy but sometimes it is as though somebody wants to do it to demonstrate where power lies," he intimated.
He further stated that when your policy announcement aligns with the expectation of the market, they pick on it and confidence is generated.
"Taxation is not a hammer where you treat everybody else in the market as a nail . . . you cannot tax your way out of poverty; it’s never done anywhere . . . " he added.
Listen to him in the video below
Source: Rebecca Addo Tetteh/Peacefmonline.com
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***barred word*** suggestion. Difficult situations calls for difficult solutions You cant sit in your comfort and postulate age old theories to solve current unexpected hardships. We are fed up you guys.
Economic hardship is everywhere and becoming worse. The govt should rather think of taxing the rich more and name it" SOLIDARITY TAX". In the US and other European countries, that type of tax is working and helping the govt squeeze the fortunate in our society. Mr. Ofori-Atta and his team must work on this immediately.
The professor of economics is not talking economics here. They keep talking about expanding the tax net so how could that be done? They keep telling the same theories they learnt in some archaic economics books.
E-Levy is not conceptually wrong but conceptually sound. Listen, in this world we live in, no one wants to pay tax but in Ghana, our attitude towards tax payment is worse yet we want good roads and hospitals. How can this be? Godfrey Bokpin is capitalising on Ghanaians' attitudes of not liking to pay tax to gain cheap popularity. So is Godfred saying that we should always borrow to fund essential infrastructure without contribution from citizens? What economics is this? Stop this propaganda and do common sense economic analysis. You are better than this
These same people will tell government that they want cola, groundnut, peanuts allowance. Where do you expecte the government to get money to meet all these committments. Hypocrites of the highest order. Mr. Economist go and come again.
Look at this ***barred word*** calling themselves academics. If you don't tax your people where do you get money to fight your way out poverty? Go to UK and see the hikes in taxation. These ***barred word*** are not helping Ghana at all. The hand outs you people are expecting would not be forthcoming because they are also having problems.