Convenors of the #FixTheCountry Movement have threatened to sue the Ghana Revenue Authority (GRA) if it proceeds with the Electronic Levy (E-Levy) implementation despite a court injunction.
In a statement, the social media activist group reiterated that any attempt by the authority to enforce the new levy come May 1 would amount to contempt of court.
In its letter to the Commissioner-General of the GRA, the movement stressed that “whether or not an injunction application has been filed or heard, the authority is required to refrain or abstain from taking any step that prevents the court from discharging its judicial function”.
The convenors have therefore asked the authority to immediately retreat from its intention to commence the implementation of the Electronic Transfer Levy Act 2022 (Act 1075).
“The convenors indicate that should the authority fail to comply with the law, they are prepared to take all law-based actions, including direct actions to prevent the violation of the Constitution, as required under Articles 3 and 42 of the 1992 Constitution; to the initiation of contempt proceedings against the Commissioner-General and the Authority should it fail to observe the law,” it said.
Background
Minority Leader Haruna Iddrisu and two other opposition legislators filed an injunction at the Supreme Court against the implementation of the Electronic Transfer Levy (E-levy).
Mr Iddrisu, together with Bawku Central MP Mahama Ayariga and North Tongu MP Samuel Okudzeto Ablakwa, are urging the apex court to restrain the Ghana Revenue Authority (GRA) from implementing the new tax.
The trio believe that the implementation should be halted until the substantive issue challenging the passage is addressed.
The injunction application was filed by their lawyer, Godwin Kudzo Tameklo, on Tuesday, April 19.
They argue that millions of people will suffer irreparable harm if the E-Levy Act is not put on hold and the court determines that its passage was unconstitutional.
According to them, the GRA would be unable to reimburse the millions who would have paid the E-levy, while the 1992 Constitution which is the supreme law of the land would have been undermined.
“That the Plaintiffs having raised an allegation of a breach of the Constitution in the passage of the Electronic Transfer Levy Act, 2022(Act 1075), in order to avoid an incalculable damage, injury and inconvenience not only to the people of Ghana but as well as undermining the Constitution which is the supreme law of the land, the justice of the case demands that the implementation of the Electronic Transfer Levy Act, 2022(Act 1075) is put on hold until the final determination of the instant suit,” the injunction application stated.
The three MPs in their substantive suit want the apex court to declare the passage of the E-Levy as unconstitutional and therefore null and void.
It is their case that Parliament did not have the right quorum to pass the E-Levy as stipulated under Article 104(1) of the 1992 Constitution, which the Supreme Court had recently interpreted.
According to them, at the time the second reading for the passage of the E-Levy was done, there were only 136 MPs present in Parliament instead of the required 138.
Therefore, they want the court to declare the whole proceedings including the second reading, third reading, and voting to pass the E-Levy, as unconstitutional and of no effect.
They had filed an earlier application against the E-Levy on 30 March 2022.
Parliament on Tuesday, March 29 approved the policy without the participation of the National Democratic Congress (NDC) MPs, after they staged a walkout during the E-levy debate.
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.