The Ghana Chamber of Telecommunications says stakeholders in the telecommunications industry were not consulted before the announcement of the 1.75% electronic levy.
On Wednesday (17 November) the Minister for Finance, Ken Ofori-Atta, announced the E-Levy, a 1.75% tax on all electronic transactions in Ghana, as a measure to “rope in the informal sector into the tax net”.
But speaking to Asaase News, Ken Ashigbey, the chief executive officer of the Ghana Chamber of Telecommunications, said the government should have held broad stakeholder consultations to shape details of the tax policy.
He said the Chamber hopes to sit down with the government and consult with officials before the policy is implemented.
“These are some of the things we have been advocating with the government, because in the past when we’ve had some of these stakeholder engagements with the government ahead of the announcement, we’re able to shape it well. But in this particular case, there was no engagement directly on the E-Levy.
“We had known that some taxes were coming because the Chamber sits on the Social Partnership Council with the government, and we’ve had some discussions ahead of the tax concerning the Budget, but we didn’t go into details. So the simple answer is that there were no engagements,” Ashigbey said.
Blot on financial inclusion
Ashigbey said the government must find a way to ensure that the introduction of the E-Levy does not affect the financial inclusion agenda.
“Then how will you determine what the impact will be? Definitely, for any product, once the price goes up, if you take the price elasticity of demand, the impact could be the fact that demand will go down.
“So, what we need to do is that how do we implement this in such a way that it does not negatively impact the government’s Digitalisation Agenda, neither does it affect the financial inclusion plan that we have?
“So, as an industry, in our engagement with the government, these are some of the things that we need to bring to the fore,” he said.
Government to engage stakeholders
However, in a Twitter post, the MP for Ningo-Prampram, Sam Nartey George, has also said the National Communications Authority (NCA) is set to meet telecommunication and service providers on Friday (19 November 2021) to discuss the implementation of the E-Levy policy announced in the 2022 Budget.
The NCA and the Ministry of Communications are now inviting Telcos and Service providers in the space to a meeting on Friday to discuss implementation of a policy announced in the budget? Such a clueless bunch of managers. Post facto thinking. 🦁😡
— Sam ‘Dzata’ George (@samgeorgegh) November 17, 2021
Let me state for the records that the govt HAS NOT engaged any of the service providers in the telecoms space on how the draconian “digital tax” would be implemented. How do you announce a tax when those to implement it & be affected by it are left in the dark? Clueless bunch.🦁
— Sam ‘Dzata’ George (@samgeorgegh) November 17, 2021
Tax loopholes
Speaking on The Asaase Breakfast Show on Thursday (18 November), the deputy finance minister Abena Osei Asare said that the introduction of the E-Levy in the 2022 Budget will help plug revenue loopholes in Ghana.
Some experts have warned that the new levy is “retrogressive” and could affect the government’s quest to deepen financial inclusion.
However, Osei Asare disagreed, saying: “In every country, citizens pay taxes, but what you do is that you make the taxes progressive, such that those who earn more feel the burden of the tax more than those who earn less.
“That is why, in this electronic transaction levy that we are coming out with, those who do GHC100 cumulatively every day are exempted from paying the levy,” she said.
Nicholas Brown
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