E-Levy Troubles: Government Misses Revenue Targets For Controversial Tax By Over GH¢500 million

• The government could not meet its revenue target for the electronic transaction levy set for the first half of 2023
• The government missed the electronic transaction levy revenue target sent by over 50%, according to the 2023 budget review
• The finance ministry has had to revise its revenue targets downward for 2023 by over GH¢1 billion

The government has missed its revenue target for the first half of the year for the electronic transaction levy (e-levy) by about 54% according to the 2023 mid-year fiscal policy review.

According to the review, the government raised only GH¢455,579,224 out of the projected GH¢982,849,212 representing 46.35%.

The government had targeted revenues of GH¢2.2 billion for the entirety of 2023.

But in the mid-year review, the government has now reviewed the target downward to GH¢ 1.1 billion.

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The e-levy rate was reduced to 1% from 1.5% in a bid to aggressively improve revenue mobilisation from the levy.

At the time, the government said this was part of a seven-point agenda aimed at restoring macroeconomic stability and accelerating our economic transformation.

Missed target a major problem

Paul Frimpong, a development economist with the Africa-China Centre for Policy & Advisory, told YEN.com.gh that the margin of the missed target should not be taken lightly.

He noted that a missed target within 30% would have sent better signals with respect to the importance of the e-levy.

“It is a big deal because the e-levy has become one of the government’s go-to revenue sources for managing the economy and you track and see that some of the government’s expenditure is actually linked to the projected revenue from the e-levy.”

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In this light, he urged the government to go back to the drawing board to find ways of making the levy more beneficial to the economy.

Circumventing e-levy

YEN.com.gh has noted that are multiple legal ways to reduce the impact of the e-levy during cash transactions.

Among these are the clearing cheques by electronic means.

Also exempted are the use of cash withdrawals and deposits at mobile money vendors.

Optimism from government

During the budget review, finance minister Ken Ofori-Atta held that Ghana was making modest gains with its plans after entering an economic crisis in 2022.

The minister claimed that the government was making some progress, with respect to the economy.

"Our plans and programmes should soon lead to a sustained increase in domestic production, including manufacturing and farming, replacing many of the products that we are used to importing.”

Minority slams government

YEN.com.gh reported that the minority in Parliament was critical of the finance minister's optimism.

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Speaking after the budget reading, Minority Leader Cassiel Ato Forson said the government had rather worsened the economy.

Forson noted, for example, that the Finance Minister had revised economic growth targets downwards from 2.8% to 1.5%.

Source: YEN.com.gh