Government has reviewed the controversial Electronic Transaction Levy to 1% from 1.5%.
According to the government, the reduction is part of measures to ensure compliance which means that a lot more people will patronize the system and government will generate the needed revenue.
Presenting the 2023 budget statement and economic Policy of government by the Finance Minister, Ken Ofori-Atta, the government has also scrapped the GHc100 exemption threshold. This implies that if an individual sends GHc5, he/she will be legible to pay E-levy.
We review the E-Levy Act and more specifically, reduce the headline rate from 1.5% to one percent (1%) of the transaction value as well as the removal of the daily threshold,” he stated on the floor of Parliament.
The review in E-levy rate forms part of initiatives, and interventions under the seven-point agenda to aggressively mobilize domestic revenue.
E-Levy in its current form has not yielded the resources as expected. The government is expecting GHc611 million from the earlier projected $1.6 billion from the E-levy.
Prior to passage of the bill into law, the minority in parliament and other stakeholders at the time advised government to consider reducing the rate from 1.75% to between 1% and 0.5% but government was adamant to the calls and rather reduced it to 1.5% before the bill was controversially passed.
Provisional data on government fiscal operations for January –September 2022 shows a shortfall in revenue performance and a faster execution of expenditures. This resulted in an overall budget deficit of GH¢41,699 million (7.0% of GDP), against a programmed deficit target of GH¢36,684 million (6.2% of GDP). The corresponding primary balance for the period was a deficit of GH¢9,597 million (1.6%
of GDP), against a deficit target of GH¢5,794 million (1.0% of GDP).
Total Revenue and Grants amounted to GH¢65,399 million (11.0 percent of GDP), compared with a target of GH¢67,307 (11.4 percent of GDP) and the GH¢49,108 million (10.7 percent of GDP) recorded in the corresponding period in 2021. The outturn for Total Revenue and Grants represents a shortfall of 2.8 percent compared to the period’s target and year-on-year growth of 33.2 percent.
The shortfall in revenue stemmed from the less robust performance recorded in all the revenue handles for the period.
Domestic Revenue for the period amounted to GH¢64,601million (10.9 percent of GDP), falling below the target of GH¢66,503 million (11.2 percent of GDP) by 2.9 percent. The outturn, however, represents a year-on-year growth of 34.0 percent and constituted 98.8 percent of Total Revenue and Grants.
Source: Kofi Ahovi