The Ghana National Chamber of Commerce and Industry (GNCCI) has dismissed claims by the Finance Minister, Ken Ofori-Atta, that the business and trading community were consulted on the controversial Electronic Transaction Levy (E-Levy).
President of the GNCCI, Clement Osei Amoako, in a press statement emphasized how inimical the 1.75% levy is to Ghana’s business community, citing threats to the competitiveness of Small and Medium Scale enterprises and a roll-back in gains to expand electronic transactions.
“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.”
“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,” President of the GNCCI explained.
The GNCCI is further warning that the 1.75% E-Levy will serve as a disincentive and punitive to existing taxpayers and threatens the gains made in Ghana’s financial inclusion journey.
Citing best practices, it stated that some African countries that have imposed e-levy have their rates less than 1%.
“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,” he further stated.
Meanwhile, the GNCCI is proposing a band of 0.5% – 1.0% as cost-shared applicable for registered taxpaying businesses in the country to ensure fairness and equity.
According to the Chamber, this has implication for widening the tax base towards increasing tax revenue.
It will also serve as an incentive for existing tax payers. In addition, the growth of SMEs and the gains in financial inclusion will be sustained.