E-Levy policy won’t derail trading activities under AfCFTA, says trade expert

The government says the introduction of the E-Levy is a sure of broadening the country's tax net

Louis Yaw Afful, xecutive director of theAfrican Continental Free Trade policy network, says the continental trading under the AfCFTA will not be derailed by the introduction of the E-Levy policy by the government.

Despite many criticisms regarding the policy, Afful says the E-Levy policy has been introduced by the government as an innovative way of widening the tax net, adding that the move also aligns with the ambition for party states to the AfCFTA treaty to increase internally generated revenues, as countries are to work towards 90% tariff liberalisation.

“Because most trading has been in the informal sector, it is very difficult for the government to raise revenue internally and so one of the ways governments are using including what we’re hearing [E-Levy] is really to widen the tax net to target the informal sector.

“And again, you realised that even at the continental free trade level, it might not affect digital trading even if it was in force … because it’s not done at the border, this transaction is internal. Continental free trade is encouraging their members to make sure they generate revenue internally and shy from borrowing from outside,” he stated.

However, the West Africa Regional Director, for CUTS International, Accra, Appiah Kusi Adomako, does not believe that the E-Levy is a panacea to solving the tax gap problem in Ghana.

He said the government may not have done a critical and holistic assessment of the impact of the E-Levy before its announcement.

Kusi Adomako added, “when the government is considering how to rake in more money, we’ve known in this country that the government’s approach has been the path of least resistance, the ‘low hanging’. And so, the ‘low hanging’ has become the E-Levy, which is more like an inescapable levy that everybody who is wild on the e-platform would have to pay.”

“For me, I think the government needs to have a full re-think on the E-Levy in a way that it will not take us backwards in terms of the speed we’re moving to digitalize the economy,” he stated.

But Finance Minister Ken Ofori- Atta has said consultations are still ongoing to factor in the concerns of stakeholders on the implementation of the E-Levy.

Speaking at a news conference on Monday (6 December), Ofori-Atta said despite concerns about the E-Levy, it still represents the government’s greatest opportunity to broaden the tax net.

Nicholas Brown

Asaase Radio 99.5 – tune in or log on to broadcasts online
99.5 in Accra, 90.7 in Ho, 98.5 in Kumasi, 99.7 in Tamale, 89.5 in Tarkwa, and 106.9 in Walewale
Follow us on Twitter: @asaaseradio995

Show More

Related Articles

Back to top button

Adblock Detected