The Minister of Finance, Ken Ofori-Atta, will return to Parliament before the end of this month with the Electronic Transaction Levy (E-Levy) to seek the legislature’s approval of the tax, Minister of State at the Finance Ministry, Charles Adu-Boahen has disclosed.
The 1.75% E-Levy which has become a subject of debate among Ghanaians when approved is expected to rake in a little above ¢6 billion in tax revenue for the country.
“This month [January 2022] we will go back to the floor of Parliament with the E-Levy and ensure that it get pass by the end of the month”, he mentioned at the investiture of the newly elected president of the Association of Ghana Industries, Humphrey Anim-Dake.
Mr. Adu-Boahen re-emphasised government’s commitment to significantly increase revenue mobilisation in 2022 to address the high public debt levels.
“Going forward, the exigencies of our current situation, high youth unemployment, limited fiscal space and a global pandemic [COVID-19] which has induced high debt levels demand that we prioritise moving our tax to Gross Domestic Product (GDP) ratio from an estimated 13.4% in 2021 to 20% in the immediate to medium term which is more align with our peers and global averages.”
“At this time, enhance revenue mobilisation is ever so critical because of the high debt levels which means that we are limited in the amount of additional borrowing we cannot take. So any expenditures should primarily be finance through revenue increase, therefore we all have to put our shoulders on the wheel as we look to ensure that we increase our revenue collection effort to ensure that we can pay for our capital expenditure needs and everything else”, he alluded.
Government meets revenue target of ¢57bn
Meanwhile, the Minister of State at the Finance Ministry has said that government met its domestic tax revenue target of about ¢57 billion (13.16% of GDP) in 2021.
He pointed out that the 2022 non-oil tax revenue target of ¢80.3 billion moved the nation into a tax revenue to GDP of approximately 16%, which is still below its medium revenue target of 18-20% of GDP.
“We will extend VAT relief on African prints for local textile manufacturers. We’ve implemented the common platform for property rate administration, beginning this month. We will also reduce the withholding tax rate for the sale of unprocessed gold, from 3% to 1.5% which should increase the formalisation of the small scale mining sector and consequently increase penetration”.
He added that “there is continued engagement with stakeholders on the Benchmark Value policy and I’m sure we will find ourselves with some good news with respect to the policy”.