Claim:
“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.”
Explanation:
The Nana Addo Dankwa Akufo-Addo government intends to get a new bill called the Electronic Transactions Levy (E-Levy), which is a 1.75% charge on all electronic transactions in the country including Mobile Money Transactions, when passed by the country’s parliament.
This was contained in the 2022 Budget Statement and Economic Policy that was presented to parliament by the Minister of Finance, Ken Ofori-Atta, in late 2021, but that bill has been met with stiff resistance and an unrelenting drive by the Minority in Parliament to ensure that it is never passed.
Not only has this been resisted by the National Democratic Congress (NDC) Members of Parliament, but many from across nearly all sectors of the economy have also registered their dismay and abhorrence for the levy.
Many believe the E-Levy will only compound the woes of the ordinary Ghanaian, but the government is confident it will rather make the country better since this could just be the only saviour for the country in going back to the IMF.
While the House is back in session, the E-Levy is yet to be presented for discussions or debate following its first rejection in the last sitting of the House in 2021, but the government is not stopping anytime soon.
In a move to broaden consultations and discussions surrounding the levy, the Ministry of Information held a Townhall Meeting on the E-Levy at Koforidua, in the Eastern Region, on Thursday, January 27, 2022.
The Minister of Communications and Digitalization, Ursula Owusu-Ekuful, who was one of the speakers at the meeting, mounted a defence for the current rate of 1.75% on all electronic transactions as contained in the E-levy Bill.
According to her, compared to a similar digital tax currently being implemented in the United Kingdom (UK), Ghana’s rate is way lower, given that the UK’s rate is 10%.
Ursula enumerated a number of taxes that had previously been introduced by governments, stressing their importance in development efforts.
“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,” she claimed.
Verification:
Without stating the exact tax from the UK that she compared with Ghana’s 1.75% E-Levy, the Minister of Communications and Digitalization, Ursula Owusu-Ekuful, was clear when she said, “In other countries, digital taxes are being introduced at the rate of up to 10%, and they’re paying. That’s the UK.”
The FactCheck desk did a quick check online to ascertain whether or not any such similar tax exists in the UK.
According to gov.uk, from April 1 2020, the government introduced a new 2% tax on the revenues of search engines, social media services and online marketplaces which derive value from UK users.
By this tax, businesses would be liable to the Digital Services Tax when their worldwide revenues from these digital activities are more than £500 million and more than £25 million of these revenues are derived from UK users.
Additionally, the DST will ensure that there was an allowance of £25 million, which means a company’s first £25 million of revenues derived from UK users will not be subject to Digital Services Tax.
Conclusion:
It has therefore been established that the said claim by Ursula Owusu-Ekuful comparing the proposed 1.75% E-Levy rate to the UK’s Digital Service Tax, which she claimed is 10%, is False.
View her Timepath below;
Source: Ghanaweb
