The President of the Importers and Exporters Association of Ghana (IEAG), Mr. Samson Asaaki Awingobit, has expressed his doubts about the possibility of abolishing the electronic transaction levy (e-levy) despite promises from political parties to do so.
He noted that both the New Patriotic Party (NPP) and the National Democratic Congress (NDC) supported the passage of the e-levy law, making it unlikely that they will follow through on their promise to abolish it.
The e-levy, introduced in 2022, taxes online electronic transactions, and Mr. Awingobit believes even though it has significantly hurt importers and exporters, causing them to operate at a loss, the tax will be maintained irrespective of which political party wins power.
He was of the opinion that political promises do not always turn to be followed through as the economic realities set in when a new political government assumes power.
Awingobit was of the opinion that the next government must rather take a holistic view of all the overall taxes regimes with a view of abolishing nuisances taxes that hurts business.
He further advised that government’s efforts must aim at evading down the cost of doing business generally in Ghana rather than imposed more taxes that generally tends to affect business in the country
“Taxes such as COVID?levy should scrapped as well other taxes associated with the imports and exports to make the country products especially exports attractive on the international markets”, he stated.
Background
The Revenue Administration (Amendment) Act, 2022 (Act 1086), was passed by Ghana’s Parliament and received presidential assent in 2022.
This amendment enables the Commissioner-General to implement a monitoring mechanism to verify the actual revenue collected by taxpayers, introduces a requirement for tax clearance certificates, and mandates returns related to the realization of assets or liabilities, among other provisions.
The bill initially stirred public debate and discontent when presented to Parliament as part of the 2022 budget, proposing a 1.75% levy on electronic transactions.
Following townhall meetings between the government and the public, this rate was reduced to 1.5%.
After the law's passage, Mr Asaaki, responding to the development, encouraged members of the Import and Export Association to use cheques and cash for payments rather than electronic platforms to avoid incurring electronic transaction taxes.