Communications Minister, Ursula Owusu has defended government’s decision to impose a 1.75% levy on all electronic transactions in the country.
Addressing a townhall meeting at Koforidua on Thursday, the Ablekuma West MP stated that, the e-levy is comparatively lower as compared to the rate of digital taxes in other jurisdictions like the United Kingdom.
According to her, if Ghana wants to mobilise enough revenue to enhance development, citizens must be willing to embrace the 1.75% e-levy. In her view, the levy is being introduced at a relatively lower rate.
“In 2008, the government of President Kufuor, introduced the Communications Service Tax in August of that year, and it became another source of income for national development. That tax was introduced at a rate of 6%, which was later increased to 9%. E-levy is being introduced at the lowest rate for any tax in Ghana, comparatively at 1.75%. Less than 2%. In other countries, digital taxes are being introduced at the rate of up to 10% and they’re paying.
That’s the UK. And we go there and seek loans from them to finance our development. When we are not paying the requisite taxes that we should”, Ursula Owusu stated.
Touching on the objective of the levy, she said when implemented, government will be able to address the growing levels of unemployment and address the country’s debt situation. Madam Ursula Owusu also said the levy will help Ghana to realise its objective as a country without aid.
However, a section of Ghanaians have asserted that the levy, when implemented will discourage consumers from patronising electronic transactions. Reacting to this, the Communications Minister assured that, the levy will not affect the usage of electronic transactions.
“When the Communication Service Tax (CST) was introduced, it faced similar opposition as we are seeing currently. And the current speaker dubbed it as ‘talk tax’, as the NDC and the industry led by the GSMA data claimed that it would damage the growth of the telecommunications industry as consumers will change their mobile communications habit. This did not happen. They were unfounded fears.
Incidentally, at the time, I was the spokesperson for the mobile telecommunications network operators, and I remember vehemently opposing the Communication Service Data based on data from the GSMA.
Several years on, we realised that those dangers were unfounded. It never happened, the industry has grown exponentially since 2008, and all of us find telecommunications and digital infrastructure applications and services as indispensable to everything that we seek to do.
The same speculations and complains are being made about the e-levy. That consumers will stop using electronic transactions because of the imposition of this levy.
I dare say that based on our experience with the CST, and lessons from other African countries, we are confident that the e-levy will not bring about any negative changes in consumer behaviour, as electronic transactions afford us the convenience, the safety, the security, that we currently enjoy”, Ursula Owusu explained.
Meanwhile, the Minority Caucus in Parliament have reiterated their decision to oppose the implementation of the e-levy. According to them, the levy is an ‘insensitive’ policy that will hurt local entrepreneurs.