By Francis Ntow/Sherrie Attitsogbi
Accra, Aug. 08, GNA – The Government has been advised to implement mechanisms to address loopholes in ‘cash out’ during Electronic Transactions Levy (E-levy).
In addition, there should be a reduction in the rate of tax from the current one per cent to a range of 0.5 to 0.75 per cent, and the tax handle be made to cover all electronic commercial transactions.
Professor Peter Quartey, the Director of the Institute of Statistical, Social and Economic Research (ISSER) who said this at an appraisal forum on the mid-year budget review in Accra on Tuesday, was optimistic that, “when done, will increased compliance and domestic revenue for the government.”
The E-levy, which was introduced in 2021 to widen the country’s tax net, particularly in the informal sector and increase domestic revenue recorded more than 380 per cent growth in revenue projections for the first six months of 2023.
However, the tax handle failed to achieve its mid-year target by more than 50 per cent.
“The E-levy growth rate for the first quarter of 2023 is 386.1 per cent year-on-year compared to the same period last year, however, it underperformed. It fell short of the programme target by 53.6 per cent.” Prof Quartey said.
He observed that many Mobile Money (MoMo) users were avoiding the payment of the levy through ‘cash out’ through negotiations with MoMo Agents who benefited, rather than the government making revenue from the levy.
“When we made calls and the rate was reduced to one per cent, you’ve seen the growth in the figure; we believe if it is reduced further to 0.5-0.75 per cent, and then we block the leakages through cash out, we’ll generate more revenue,” he said.
The Economist said electronic transactions tax had the potential of increasing domestic revenue, but it should be extended to cover all online transactions, including e-commence.
“The initial idea was E-levy, but it’s narrow, it should be e-commerce. If the Government is able to rope in all of these and the rate is low that even if you are paying, you won’t feel it, people will pay,” he said.
Prof. Quartey called for an evaluation of the taxes that were underperforming, including the COVID-19 levy, and property rate.
GNA
SOF