-Advertisement-

-Advertisement-

Akufo-Addo signs E-Levy Bill into law

President Nana Akufo-Addo has signed the controversial Electronic Transfer Levy (E-Levy) Bill into law.

The final endorsement by the president comes two days after parliament passed the bill.

It implies that the bill will likely be operational by May 2022 without any major hurdle, as suggested by Finance Minister Ken Ofori-Atta.

Mr Ofori-Atta said they had received assurances from the Controller and Accountant General and the Ghana Revenue Authority (GRA), who will be the revenue collectors for the new levy.

A one-sided House passed the bill after the Minority in Parliament staged a walkout on Tuesday, 29 March 2022.

There was a heated debate after Mr Ofori-Atta moved a motion to approve the revised bill.

The Majority in Parliament fiercely defended the bill and pointed out the advantages of the E-levy in reviving the economy.

On the other hand, the Minority in Parliament argued out reasons for the bill’s rejection.

For them, the levy would culminate in hardships.

The NDC MPs believed that the new tax was not the solution to the country’s economic challenges.

They then walked out of the Chamber as the bill was adopted for consideration and amendment.

Among the revisions was the levy reduction from the initial 1.75% to 1.5%.

However, the Minority in Parliament rejected the passage of the bill describing it as “null and void”.

Minority Leader Haruna Iddrisu said the House did not have a voting quorum when the bill was read for the second and third stages.

Additionally, he said the House did not also have a voting quorum during the deliberations and considerations.

For him, “it was a charade” and “there is no E-levy”.

Together with  Bawku Central MP Mahama Ayariga and North Tongu MP Samuel Okudzeto Ablakwa, they filed a suit challenging the passage of the bill at the Supreme Court.

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.

Parliament degenerated into fisticuffs at a meeting to approve the levy, prompting an adjournment to 18 January 2022.

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”.

Additionally, the Association of Mobile Money Agents had planned a strike and demonstration over the controversial e-levy proposition on  Thursday, 23 December 2021, but called it off.

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.

Leave A Comment

Your email address will not be published.

You might also like
where to buy viagra buy generic 100mg viagra online
buy amoxicillin online can you buy amoxicillin over the counter
buy ivermectin online buy ivermectin for humans
viagra before and after photos how long does viagra last
buy viagra online where can i buy viagra