E-levy will collapse digital industry – Terkper

A former Minister of Finance, Seth Terkper, has said that the introduction of the controversial Electronic Transfer Levy (E-levy) might lead to the collapse of the digital industry in the country.

According to him, the rationale and approach being employed by the government to implement the E-levy in Ghana is not backed by law.

“Yes, the digital economy is being taxed globally, but are we using existing tax instrument to tax them which is another way of broadening the tax base or we are importing a levy with a defect.

“Ghana has a well-structured tax so if you work and earn income you are taxed. Either as an employee, as a business you pay corporate income tax or profit tax. If you make capital gain, there is capital gain tax which is structured,” Mr. Terkper told Francis Abban on the Morning Starr Tuesday whiles commenting on President Akufo-Addo’s interview with BBC.

The Former Finance Minister also asked the government to tell Ghanaians the context in the global tax law within which they are applying the E-levy.

“If you say E-levy is taxing an industry, are we targeting an industry and therefore it is fair to tax the industry with E-levy, an infant industry,” he quizzed.

Background

President Akufo-Addo has justified the passing of the controversial Electronic Transaction Levy (E-levy) stating that it will aid in reviving the economy.

In an interview with BBC’s Peter Okwoche, the President emphasized that his government is doing all it can to revive the economy and bring it to the state Ghanaians want it to be.

“In Ghana, the recovery programme we have is very credible and that is what is going to give us the opportunity to come out of this period a stronger economy, and it is that future we are looking at. The digital economy is emerging as the biggest economy in the country and for a long period, it has not had any tax at all, so it is important that it also comes into the net,” he stated.

He continued “The world is going through very difficult times. Ghana is no exception, Nigeria is no exception. There is no country in the world that has escaped the ravages of COVID-19. What you need to look at is the elements being put on the ground that looks beyond the Russia Ukraine war.”

However, even before the Electronic Transaction Levy (E-levy) takes effect next month, available data show that the mobile money platform has lost about GH¢10billion in value between November 2021 and January 2022 – a development that raises serious concerns about the new tax’s ability to rake in the anticipated revenue.