E-Levy: Maintaining 1.75% rate will worsen plight of businesses, SMEs – GNCCI to govt

Parliament at an impasse over E-Levy

We were not consulted over E-levy – GNCCI

E-Levy to impose 1.75 percent charge on all electronic transactions

The Ghana National Chamber of Commerce and Industry (GNCCI) has bemoaned the lack of engagement between the trading community and government on the Electronic Transaction Levy.

As part of

Read full articleefforts to widen the tax net and rake in revenue, Finance Minister, Ken Ofori-Atta announced the introduction of the E-levy contained in the 2022 budget.

The levy seeks to impose a 1.75 percent charge on all electronic charges covering mobile money payments, ATM withdrawals and others.

But a statement issued by president of the Chamber, Clement Osei Amoako laments that the rate for the proposed tax will worsen the plight of businesses and the trading community.

“We are concerned that the burden-sharing and consultation was done without representation from trade and business associations whose constituents will be greatly affected by this policy. At the onset of the policy announcement, the GNCCI called on government to re-consider the rate of 1.75% as it will further worsen the plight of businesses, particularly SMEs who are mainly growth-driven (three out of four SMEs) and susceptible to firm-specific risks, industry volatility, and economic cycles,” portions of the statement read.

“Government’s insistence on maintaining the rate at 1.75% does not augur well for businesses, especially who are recovering from the shocks of the pandemic, amidst high cost of doing business in the country,” it added.

President of the Chamber further emphasized that the introduction of the tax measures, coupled with its current rate will render Small and Medium Scale enterprises less competitive and erode gains made towards digital transactions and financial inclusion.

The GNCCI cited that all though some African countries have imposed an e-levy, their rates are pegged around less than 1 percent for transactions.

“While being mindful that the revenue estimation took into account the 1.75% e-levy to meet the budget deficit, the Chamber calls on government to hasten slowly with the implementation. It is instructive to support businesses to grow and thrive (increased output, employment, and tax revenue) than to burden them with increasing cost of doing business that will stifle output, employment, and tax revenue,” Clement Amoako added.

To mitigate this, the GNCCI president has proposed that government sets a bad of 0.5 percent – 1.0 percent as part of cost-shared applicable for taxpaying businesses in the country.