A former Board Chair of the Ghana Revenue Authority (GRA), Professor Stephen Adei, is making a case for the passage of the much-contested Electronic Transfer Levy (E-Levy).
He says the E-levy is a more viable alternative in terms of solving revenue shortfalls than suggestions for the country to seek a bailout from the International Monetary Fund (IMF).
Prof. Adei, the one-time Rector of the Ghana Institute of Management and Public Administration (GIMPA) maintained that the panacea to generating more revenue to revive the economy is to do that domestically through means like the new E-levy tax measure.
“I don’t support us going to the IMF now. This is the time we have to stop this NPP and NDC thing and get [going]. I don’t think we need to go to the IMF because there are two things that will happen about policy descriptions and the amount of money we will get because they won’t give us more than half a million dollars which is peanut and less than half of what E-levy will give us. So we need policy direction changes and actions, and we can do it domestically.”
For Prof. Adei, the amount anticipated to be realised from the E-levy is enough to seal some of the revenue loopholes, and must not be allowed to elude the government.
“I can see that they would be getting about GH¢5 billion. GH¢5 billion is still a big amount; that’s almost $1 billion. Even if they are not likely to get what has been projected given the situation we are in now, I believe that the MoMo must be taxed and, at least, it will help bring in GH¢5 billion to plug the hole”, the academic emphasized.
He backed his point by saying that the amount of money to be used in collecting the E-levy is low as compared to other tax policies that are costly in accumulation.
“Immediately, we must find low-hanging fruits and the MoMo [tax] is one of the low-hanging ones. In a developing country, one of the biggest challenges in taxation is that if the cost of collection, sometimes, exceeds what you’ll get, then you must, as well, let it go. With the MoMo tax, however, the cost of collection is almost zero”.
The rate in the budget was 1.75 percent, but it is expected to be reduced to 1.5 percent. Despite the intended reduction, there is still stiff opposition to its passage.
Some analysts have proposed seeking an IMF bailout as a better alternative amidst public disapproval of the E-levy, but the government has said it will have none of that.
Others have also brushed off calls for the government to go under an IMF programme, insisting that the options left for Ghana to consider are fiscal discipline, a reduction in wasteful expenditure, and the sealing of revenue leakages.
Send your news stories to dannyboy744@gmail.com and via WhatsApp on +233 266777777
