The government’s insistence on carrying out the controversial electronic Transaction Levy despite stiff opposition has been described as disturbing by financial analyst Ken Thompson.
Mr. Thompson, who is also the Chief Executive Officer of Dalex Finance, believes that if the tax policy is implemented, it will cause some businesses to fail.
That isn’t his only point; he also claims that personnel in charge of overseeing the government’s revenue collection are contributing to the country’s tax system’s flaws.
“The E-levy is not the game-changer. there may be a justification for taxing electronic transfers, but it doesn’t solve the issue of widening the tax net. Potentially, if we are not careful, and we push it through the way that it’s been presented, it will kill a lot of businesses and all electronic transactions. We do not have the incentive to encourage the people to make these things work. There is absolutely zero incentive for people to do the right thing.”
“I think the E-levy is being oversold. We are being told that if we don’t do E-levy, we will go into a tailspin and that if we do E-levy we will end up with a street paved with gold. If you take for instance those who accept money through their Mobile money wallet, it is going to kill that because they are going to pay tax on it. That is the reality, Even when the sender pays, it kills the business. So that business is dead. When we did the analysis, we realized that the amount of taxes is going to be bigger than investments.”
The Dalex Finance Boss also wants the government to do a proper introspection of its current revenue generation strategies.
He insisted that ongoing discussions to raise funds through the contested Electronic Transaction Levy and suggestions for Ghana to return to the International Monetary Fund (IMF) is a non-starter and must be aborted without any further delay.
He advises the government considers other domestic means to shore up revenues other than plans regarding the E-levy and a fallback to IMF.
Among other things, the Financial analyst revived the conversation for the government to restrategize and raise revenue through a more robust property rate collection system arguing that while the E-levy is meant to hurt the business environment, financial support from the IMF on the other will only worsen Ghana’s ailing economy.
“We need to demystify this IMF business. Ghana is in a tight situation. Let’s not go to the IMF because their conditions may not help, so government must look for ways to increase domestic revenue.”
“Let’s go for property tax with a vengeance. Let’s set up courts that collect the tax 24/7, give bailiffs more powers to collect it, and set targets for the GRA and that’s how we can raise the revenue. It’s very important, and if I were the Finance Minister, I will go after this tax with a vengeance. So for me, IMF is not the solution because what will they tell us that we do not know already”, Ken Thompson suggested.
