The standoff in Parliament over the E-Levy and other revenue bills, according to Finance Minister Ken-Ofori Atta, does not bode well for the legitimacy of the 2022 Budget.
According to a tweet from the Finance Ministry, he mentioned this during the Labour Conference in Kwahu, Eastern Region, on Tuesday March 1.
Osei Kyei-Mensah-Bonsu, the Majority Leader in Parliament, has indicated that the administration miscalculated the opposition to the E-levy proposal in the 2022 budget statement.
He stated that they anticipated some level of protest when presenting the policy, but not to this extent.
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“You will see the Finance Minister travelling to host townhall meetings in several regional capitals,” the Suame politician and leader of Government Business in Parliament told TV3’s Benjamin Aidoo in an exclusive interview.
“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.
