Prime News Ghana

'Drop that obnoxious E-Levy' by Dr Theo Acheampong

By Dr Theo Acheampong
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1. As I've argued previously, the electronic levy (e-Levy) is not tied to any value creation. It is simply a tax grab of people's savings.

Having your money in a bank account, momo wallet or under your pillow shouldn't attract any tax! Besides, people already pay for consumption taxes such as VAT+NHIL+TOURISM LEVY+COVID TAX on products and services they use and decide to pay by cash, momo or indeed any other means. If the problem is with how we collect these other consumption taxes then let's fix that and not seek to shift the burden or blame on consumers to pay more taxes. The e-levy defies the principles of equity/fairness and neutrality, among others. It is a lazy tax!

2. If the government really wants more revenue, then there are obvious ways to rake in more taxes:

How do we raise more taxes/revenues?

3. Pass the Tax Exemptions Bill and start implementing it. The Bill has been in Parliament since April 2019
--- Bill seeks to streamline the country's tax exemption regime, eliminate abuses, and improve efficiency.
--- Exemptions from import duty, import value-added tax (VAT), import National Health Insurance Levy (NHIL), withholding taxes, and domestic VAT are subject to widespread corporate abuse by especially multinational enterprises in the mining, telecoms, retail trade, and manufacturing sectors.
--- Recent estimates indicate that tax exemptions cost about 2% of GDP annually – i.e., $1.44 billion [$72 billion economy]. Of course, we cannot eliminate all exemptions but even saving half of this will amount to $700 million of new revenue.

4. We can also raise more taxes via
--- Property rates/wealth tax
--- Close loopholes at the port (tax evasion)
--- Tax the multiplicity gambling platforms and the vices they are creating for the youth
--- Impose a mining super profits tax (subject to stabilisation provisions for existing agreements)
--- Address transfer pricing in multiple sectors, including extractives

5. Cut back on expenditure
--- Cut your coat according to your size. We can’t be promising things that we don't have the money nor the capacity to raise money to do!
--- Value for money audits; payroll reform; implement GIFMIS at all MDAs, reduce the use of virements.