Economist, Dr. Patrick Asuming, has stated that given the government’s current circumstances and the need to generate revenue, the E-Levy may not be scrapped like other unpopular taxes.
The electronic transfer levy has received several backlashes and controversies since its announcement by the finance minister in the 2022 budget.
Dr. Asuming noted that, unlike the luxury tax that was scrapped entirely by government, it will be surprising if the E-Levy is scrapped.
“I’ll be surprised if the tax is withdrawn even though we’ve seen this government bring in a tax like the luxury vehicle tax and then scrap it altogether. I’ll be surprised given our current circumstances and then how much government needs revenue and the fact that we haven’t made too much progress with the other revenue streams”, he told Joy Business.
“So, I’m not expecting that over the next year or so, the government will be happy to scrap the tax. What they may do is make tweaks here and there, so that if there are specific areas that have challenges, they [government] will address them,” he added.
“In the immediate term, I don’t expect the government to scrap this particular tax, however unpopular it is”, he emphasized.
However, Dr. Asuming believes government needs to start collecting property taxes as it is another avenue for revenue mobilization.
“I think where else the government needs to be raising revenue is very clear. It was in the 2022 Budget and when the finance minister [Ken Ofori-Atta] spoke about the updated measures, he also mentioned them. He told us that by this time around, he will have started reforming the property tax system. If we do that and do it properly, we will be able to raise more revenue”.
“And then the big one is the exemptions and the finance minister is imploring Parliament to pass the Exemptions Bill. If they manage to pass the Exemptions Bill and they’ve addressed the major loopholes that the exemptions are causing us, then we’ll be able to raise more revenue,” he added.