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E-Levy most innovative tax in 2022 Budget – Danquah Institute

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Danquah Institute boss

Policy Think Tank Danquah Institute says it has not asked government to suspend the e-tax for broader consultations but rather firmly holds the position that the e-levy is appropriate, right, timely and is an innovative tax. 

The introduction of the e-levy, which is a 1.75 per cent tax on all e-transactions which include banking and mobile money transactions in the 2022 budget has infuriated many Ghanaians who are kicking against its implementation.  

However, the Danquah Institute noted that the introduction of the levy on all electronic transactions to widen the tax net and to rope in the informal sector, “is truly a commendable initiative.”

In a statement, the Institute pointed out how research indicates that phenomenal growth and resilience occurred in the communications sector even in the midst of the Covid-19 pandemic.

It also indicated that from projections made, the government will be able to raise revenue from the initiative.

Government is looking to make 6.9 billion from Electronic Transactions Levy (E-levy) in 2022 alone.

The Danquah Institute comparing this figure with what government is projected to get as import duty on all imports projected to come into the country in 2022 (i.e. 9 billion as duties levied on all imports that will come into the country) “the e-levy is a powerful means for the government to raise revenue.”

“The levy, therefore, provides a broad-based platform for government to raise needed revenue. It will not go to enrich the service provider, but will be going into government coffers to support entrepreneurship, pay for our roads and other developmental projects and all that it has been earmarked to do,” the statement said.

The Danquah Institute stressed that the e-levy is a powerful tax revenue raising handle, and government should be able to implement it for that purpose.

The Institute also commended the Government for making the e-levy pro-poor.

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