Ken Ofori-Atta, the Minister for Finance, has said that the E-Levy introduced by the NPP government is not the most egregious tax ever passed in this country.
Ofori-Atta said the E-Levy has been made necessary by Ghana’s quest to develop using its own resources, and not through constant borrowing from external sources.
The minister argued that the country cannot afford to enter into another managed programme with the International Monetary Fund (IMF), because the corresponding restrictions will not help Ghana’s development.
He was speaking at the government’s town hall meeting on the E-Levy on Thursday (27 January 2022) in Koforidua in the Eastern Region.
Disaster in the making
“This is not the most egregious tax that you could get,” Ofori-Atta said, “but it really leads to the issue of inclusion of all of us to build our society and wherever we really want to go to transform this land.
“And that has been the subject of this debate. The question is: do we want to build the new Jerusalem?
“People forget what happened when we were in the IMF programme. We couldn’t pay for nurses, teachers, we couldn’t hire any more. We can deal with them for them to give us advice, but we need not ever get into an IMF programme.
“… And if you don’t do this E-Levy, you’re just pushing yourself in a way that will potentially end up in such disaster.”
Also speaking at the town hall meeting, Ursula Owusu-Ekuful, the Minister of Communications and Digitalisation, said the E-Levy will help the government generate the revenue it needs to develop the country.
“We need to finance our developmental agenda and stop depending on loans and borrowing from other countries if we are to be truly independent,” Owusu-Ekuful said.
She argued that Ghanaians have no cause to be alarmed, as the E-Levy will help raise the revenue Ghana needs to support its development. She added: “The E-Levy is being introduced at a … rate of 1.75%. In other countries, digital taxes are being introduced to the tune of 10% and we travel there to seek loans for our development and to borrow.
“In 2020, the Communication Service Tax (CST) Amendment Act was passed to reduce the rate from 9% to 5%. When the CST was introduced, it faced similar opposition [to what] we are seeing currently and the current Speaker dubbed it a ‘talk tax’; and the NDC and the industry, led by the GSMA [Global System for Mobile Communications] data, claimed it will damage the growth of the telecommunications industry, as consumers would change their mobile communication habits. This did not happen; they were unfounded fears,” she said.