E-Levy Underperformance: Kwabena Duffuor Suggests Scrapping Of Controversial Tax

• Former Finance Minister Dr Kwabena Duffuor has suggested that the government scrap the Electronic Transfer Levy (E-Levy)
• Duffuor described the e-levy as a nuisance tax that should be scrapped if it is not meeting revenue targets
• The government missed the e-levy revenue target by over 50%, according to the 2023 budget review

A Former Finance Minister Dr Kwabena Duffuor has suggested the scrapping of the e-levy because of its poor performance.

Duffuor, who was recently contesting to be the National Democratic Congress flagbearer, said the e-levy remained a nuisance tax.

“We need to ask ourselves, are we getting enough from it? If we are not getting enough from it, then it is a nuisance tax, and we should scrap it,” he said, speaking on Citi TV.

YEN.com.gh previously reported that the government had 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.

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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.

Despite these failings, Finance Minister Ken Ofori-Atta held that Ghana was making modest gains with its plans after entering an economic crisis in 2022.

E-levy underperformance a significant 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.

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

Circumventing the e-levy

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

Among these are the clearing cheques by electronic means. Also exempted are cash withdrawals and deposits at mobile money vendors.

Source: YEN.com.gh