As stakeholders express concern about the low level of revenue being generated from the Electronic Transfer Levy (E-Levy), a tax analyst is warning that government is likely to withdraw the tax measure if the revenue yields remain low.
The implementation of the E-levy, which commenced in May, was originally expected to help bring in about GHC 6.9 billion this year to shore up government’s revenue. But there appears to be challenges with the amount that the levy is bringing in.
In a recent post on Twitter, a leading member of the New Patriotic Party (NPP) Gabby Asare Otchere-Darko noted that the E-Levy has been delivering only 10% of estimated revenue targets following its implementation, a remark that has received strong reactions from the minority in parliament as well as some economists.
For Tax analyst Francis Timore Boi, if things don’t drastically improve in 3 to 4 months, with regards to the proceeds collected from the E-Levy, it is likely to be withdrawn from the system.
“If things don’t change, I think that the E-Levy is going to be classified as a nuisance tax. And when we say nuisance tax we mean a tax paid in small but frequent amounts, usually by consumers. So if we are anticipating that it will bring us GH¢ 4.2 billion but at the end of the day we are just about collecting less than GH¢ 300 million then there is no need to keep it, you would have to withdraw it because it doesn’t achieve its purpose.”
“Aside from the nuisance you are causing consumers, you are better off withdrawing it so you earn their sympathy. If we are unable to increase performance to about 60% or 70%, I think that E-Levy stands a chance of being withdrawn,” he added.