E-levy won’t derail trading activities under the AfCFTA
The Executive Director of the African Continental Free Trade Policy Network, Louis Yaw Afful, has indicated that the introduction of the electronic transactins levy by the government will not derail trading under the AfCFTA.
Mr. Afful noted that inspite of the many criticisms on the E-levy, the government introduced the levy as an innovative way of widening the tax net, adding the move aligns with the ambition for states to the AfCFTA treaty which is to increase internally generated revenues, as countries are to work towards 90% tariff liberalisation..
“Because most trading has been in the informal sector, it is very difficult for the government to raise revenue internally and so one of the ways governments are using including what we’re hearing [E-Levy] is really to widen the tax net to target the informal sector.
“And again, you realised that even at the continental free trade level, it might not affect digital trading even if it was in force … because it’s not done at the border, this transaction is internal. Continental free trade is encouraging their members to make sure they generate revenue internally and shy from borrowing from outside,” he stated.
On the other hand, the West Africa Regional Director for CUTS International, Accra, Appiah Kusi Adomako, does not believe that the E-Levy is a panacea to solving the tax gap problem in Ghana.
He said the government may not have done a critical and holistic assessment of the impact of the E-Levy before its announcement.
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“when the government is considering how to rake in more money, we’ve known in this country that the government’s approach has been the path of least resistance, the ‘low hanging’. And so, the ‘low hanging’ has become the E-Levy, which is more like an inescapable levy that everybody who is wild on the e-platform would have to pay,” Mr Adomako said.
“For me, I think the government needs to have a full re-think on the E-Levy in a way that it will not take us backwards in terms of the speed we’re moving to digitalize the economy,” he added
But Finance Minister Ken Ofori- Atta has said consultations are still ongoing to factor in the concerns of stakeholders on the implementation of the E-Levy.
Speaking at a news conference on Monday (6 December), Ofori-Atta said despite concerns about the E-Levy, it still represents the government’s greatest opportunity to broaden the tax net.
