E-Levy impasse does not augur well for credibility of 2022 budget – Ofori-Atta

Finance Minister, Ken-Ofori Atta has said the deadlock in Parliament regarding the passage of the E-Levy and other revenue bills does not augur well for the credibility of the 2022 Budget.

He said this during the Labour Conference in Kwahu in the Eastern Region on Tuesday March 1, according to a tweet by the Finance Ministry.

The Majority Leader in Parliament, Osei Kyei-Mensah-Bonsu, for his part, has said the government underestimated the resistance of the introduction of the E-levy policy in the 2022 budget statement.

He said they expected some form of opposition while introducing the policy but not this magnitude.

Speaking in an exclusive interview with TV3’s Benjamin Aidoo, the Suame lawmaker and leader of Government Business in Parliament said “You will see the Finance Minister going to organize townhall meetings in various regional capitals.

“Maybe, we underestimated the resistance. In any human institution people really will not come out openly to embrace the imposition of taxes, so we thought that yes, there will be some resistance it being a new levy or tax that we are going to introduce, but maybe we underestimated the strength of the resistance.

“Maybe, what we are doing now, I know some of my colleagues are out in various regions and constituencies trying to explain matters to their constituents, with hindsight maybe, this ought to have preceded the introduction of the E-levy. Perhaps, next time we will do better.

“But as I said we are still engaging and I want to believe that we will certainly bring this to successful completion.”

The Minority in Parliament rejected the introduction of the E-levy.

The Minority Leader Haruna Iddrisu said the policy is a disincentive to the growth of digital economy hence, the Minority will not support it.

Speaking at a post budget workshop in Ho on Saturday November 20, he said “Mr Speaker, understandably, we see that the Minister of Finance seeks to introduce some measures including the now popularly declared e-levy or digital levy  as some have quite named it.

“Mr Speaker, our concern is whether the e-levy itself is not and will not be a disincentive to the growth of digital economy in our country . We are convinced that the e-levy may as well even be a disincentive to investment  and a disincentive to private sector development in our country. We in the minority may not and will not support government  with the introduction of that particular e-levy . We are unable to build national consensus  on that particular matter.”

The Finance Minister Ken Ofori-Atta expressed shock at the rejection of the E-levy proposal by some youth of this country including some free senior high school beneficiaries.

He asked whether they know what the cost of rejecting the E-levy will be, given that the government needs resources to fund the programme and other initiatives.

Speaking at the Government’s 3rd Townhall meeting to sensitize the public on the need for the E-levy to be passed by Parliament in Tamale on Thursday February 10, he said “If  I look at  E-levy for instance, and I say that  this year we intend to collect 7billion cedis  and I look at  mobile money  subscribers  and there are over 21million  of us.

“So assuming I divide  this 7billion  by 21million  of us , it is about 300 cedis  a year  for each person, divide by 12.

“So when I see the energy especially with which graduates  who have gone through free senior high  are against  E-levy,  I ask whether the  they are calculating  what the cost is.  And I ask  in truthfulness that  does any graduate  make more than  8000 or 5000?

“Assuming you are a graduate and you even made  100,000 cedis a year  and you transfer  all of that through MoMo, how much will that be? 10 per cent of 100,000  is 10,000 , so a third of that is  3000. So  3000 cedis  for your roads , for your free education , for all of that  and you are up in arms.

“So truly who should be paying for it? You have every responsibility to ask me to account for it. But we as a people, we can’t pretend that we don’t need these  resources to do what we are doing. No graduate makes 100,000 cedis a year.”

Regarding calls to go to the International Monetary Fund (IMF), Mr Ofori-Atta insisted that Ghana would not return to the Bretton Woods institution for support in order to deal with the challenges that the local economy is going through at the moment.

Doing so, he said, will have dire consequences.

He also indicated that Ghana had the capacity to raise domestic revenue for development. The government has been called upon to return to the IMF for support instead of relying on the proposed E-levy for revenue.

For instance, a former Member of Parliament for New Juabeng South, Dr Mark Assibey-Yeboah believed that a return would rescue Ghana’s struggling economy.

“Without a doubt, I think we should be placing a call to Washington if we haven’t really done that. We are just not going to ask for the funds just because E-levy has been passed or not. E-levy will just bring about GH¢5 billion. We are in a deep hole of our tax revenue and facing difficulties, so going to the Fund will give us some support.

“So there is nothing wrong with going to the Fund.  Ghana is a member of the IMF so what is wrong going to ask for support when we are in difficulties to go and pool resources.  If I was the finance minister, I will be convincing the President that it is about time we went back,” he told Citi.

Mark Assibey Yeboah also added that the revenue expected to be accrued from the E-levy is to ensure the economic stability government is eyeing.

He further cast doubt on the government’s ability to raise the projected GH¢6.9 billion target, saying the maximum the government can raise from the controversial e-levy is GH¢5 billion.

“The GH¢6.9 billion target cannot be realized. There are a lot of exemptions so, in my estimation, the maximum amount we can get from the E-levy is GH¢5 billion, and that is less than a billion dollars, so I do not think that the E-levy is going to be a panacea to our revenues. Going to the IMF will ensure some stability and above all, we are going to get some $3 billion”.

The General Secretary of the National Democratic Congress (NDC) Johnson Asiedu Nketia also made similar call to the government.

Asked whether President Nana Addo Dankwa Akufo-Addo should go to the IMF, while speaking on the New Day show on TV3 on Monday February 7, he answered “I think it is something that they have to consider. if it is the only that will take us out of this problem then the earlier the better.”

But Mr Ofori-Atta who had earlier stated that the government would not go back to the IMF insisted that “I can tell you, as my colleague deputy said, we are not going back to the IMF, whatever we do we are not [going back]. The consequences are dire, we are a proud nation, we have the resources , we have that capacity, don’t let anybody tell you … we are not people of short-sighted, we need to move on,” Mr Ofori-Atta said.

By Laud Nartey|3news.com|Ghana