The #FixTheCountry Movement has refused to join forces with the opposition National Democratic Congress (NDC) for a demonstration against the proposed E-levy.
Finance Minister, Ken Ofori-Atta, withdrew the proposal from parliament to revise the rate from the initial 1.75 percent to 1.5 percent but a section of Ghanaians have kicked against its implementation.
Against this backdrop, the opposition party has planned a demonstration on Thursday, 10 February 2022, and threw an invitation to the #FixTheCountry Movement to join in the protests.
However, the campaigners have noted that even though they are against the E-levy, they are refraining from aligning with the NDC to diffuse any political undertones in their activities.
“In light of these, we think that the time has come for us to build a multi-sectoral and non-partisan coalition against the E-Levy. #FixTheCountry is committed to leading that process,” they said in a statement.
The group encouraged “all actors and political parties, including the NDC to continue to oppose the E-Levy vigorously, including by holding the front of the opposition with their representatives in Parliament”.
They were of the view that “the NDC can effectively cripple the government’s agenda in parliament, if they maintain their commitment to the course, without settling or negotiating away the people’s opposition to the levy.”
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.
At a media briefing on Wednesday, 19 December 2022, Mr Ofori-Atta highlighted the importance of the E-Levy to ensure debt sustainability levels at a time Ghana’s credit rating has been downgraded to ‘B-‘from ‘B’, with a negative outlook by the international credit rating agency Fitch.
The first time government hinted at the E-levy was in the 2022 Budget and Economic Policy.
Even though some other items have been approved by parliament, the E-Levy is outstanding with fierce opposition from the Minority.
The levy has divided parliament, with the Majority pushing for approval, while the Minority has rejected 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.
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 had left and delegated the First Deputy Speaker, Joe Osei Owusu, to take over proceedings.
The Minority has said it will do all it can to ensure that the bill does not see the light of day, insisting it is not in the best interest of Ghanaians.
Discussions on the proposed levy
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 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 is not entirely opposed to the levy, they hold the opinion that “the 1.75% E-Transactions levy rate is high”.
Analysts from the firm are of the belief that the scope and coverage of the levy are wide enough to generate the targeted revenues “if it is monitored and managed effectively”.
For Speaker of Parliament Alban Bagbin, the approval of the E-levy will spell doom for the governing New Patriotic Party (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.