E-levy: Cut down on profligate expenditure, plug the leakages in the system to make for the expected revenue – Baskin Africa

Baskin Africa has suggested different ways by which the Nana Addo and Bawumia led government can raise the expected revenue from the proposed E-levy.



In a press statement released today, Tuesday February 1, 2022, the policy think-tank has suggested the cutting down on profligate expenditure.

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To this, Baskin Africa has advised the government to consider the expenditure outlines as proposed in the 2022 budget, as it is of the view that “the government could still make the expected GHC 6.9bn from E-levy, by cutting down on some proposed expenditure lines”.

“For instance, a cut on the about GHC 3bn allocation to the Office of the President will not only create space to envelop some of the projected revenues from the E-levy, but will equally serve as the first step by government to sacrifice for the citizens to emulate”, part of the statement indicated.

Baskin Africa says although it believes that government machinery must run, the “huge expenditure lines meant for consumption related activities out of the GHC 3bn allocations which do not necessarily engineer any economic development must be slashed”.

“We vehemently reject the continuous rental of a private jet for use by the President at a time citizens are being taxed to their chocking end”, it added.

Also, the group says the government must consider plugging leakages in the system. The 2020 Auditor General’s report revealed that about GHC 12bn was lost to financial irregularities and institutional weaknesses.

“With these revelations, if the government has the political will to plug the leakages in the system and effectively cut down the waste, more money would be saved, and this unpopular E-levy would not have been necessary to start with”, it stated.

Read the full statement below:

THE GOVERNMENT MUST CUT DOWN ON PROFLIGATE EXPENDITURE AND PLUG THE LEAKAGES IN THE SYSTEM TO MAKE UP FOR THE EXPECTED REVENUE FROM E-LEVY.



Baskin Africa has been monitoring the raging controversy around the Government’s proposed Electronic Transaction Levy (E-levy). As a think tank, we are not oblivious of the need for government to raise revenue for the necessary expenditures. As much as possible we will support the government in its quest to raise revenue, but we would stand against the misappropriations and profligate expenditures of that will not yield any positive economic returns to the ordinary taxpayer but the privilege few in government.

Government through the relevant ministries and agencies over these past weeks are trying to explain the reasons why Ghanaians must support and pay the E-levy. After monitoring these engagements on different platforms and the responses from Ghanaians, it is crystal clear majority of Ghanaians are not convinced with all the reasons the Government places on the table. The recent engagement was at a Town Hall Meeting in the Eastern Region, and the responses from majority of Ghanaians after the said meeting is a clear testament that they are vehemently against the E-levy.

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Considering the expenditure outlines as proposed in the 2022 budget, we are of the view that the government could still make the expected GHC 6.9bn from E-levy, by cutting down on some proposed expenditure lines.

For instance, a cut on the about GHC 3bn allocation to the Office of the President will not only create space to envelop some of the projected revenues from the E-levy, but will equally serve as the first step by government to sacrifice for the citizens to emulate. Government machinery must run, but the huge expenditure lines meant for consumption related activities out of the GHC 3bn allocations which do not necessarily engineer any economic development must be slashed. We vehemently reject the continuous rental of a private jet for use by the President at a time citizens are being taxed to their chocking end. Meanwhile, we are reliably informed that the Presidential jet is in good condition for all the travels of the President.

Again, the Auditor General in the 2020 audit report revealed that about GHC 12bn was lost to financial irregularities and institutional weaknesses. These irregularities represent either losses that had been incurred by the State through the impropriety or lack of probity in the actions and decisions of public officers or on the other hand, the savings that could have been made, if public officials and institutions had duly observed the public financial management framework put in place to guide their conduct and also safeguard national assets and resources.

With these revelations, if the government has the political will to plug the leakages in the system and effectively cut down the waste, more money would be saved, and this unpopular E-levy would not have been necessary to start with.

According to the Deputy Minister of Finance, Dr John Kumah, a survey conducted by the government revealed that after the implementation of the E-levy, the Mobile Money Transaction will decline by 24%. This implies that, not only will the government not achieve the projected GHC 6.9bn, but it would render thousands of MoMo agents jobless and most Ghanaians further impoverished. Aside this, the government must learn from countries like Uganda and others in Africa that implemented the Electronic Transaction Tax, and the negative impact it had on their economies thereafter.



The world has gone digital; the agenda by Ghana’s government to build a digital economy is largely pinned on e-commerce. So, if we go by the government’s own survey which revealed that MoMo transactions will decline by 24%, the digitalization agenda would have been defeated. Individual consumers are rational just as companies and organizations are tax averse so, this E-levy when implemented, would create an easy route to return to the cash and carry system.

We wish to call on the government to consider the alternatives of cutting down the profligate expenditures, especially at the office of the President, and also plug the leakages in the system which results to the lost of billions of Ghana cedis to the state. With these in place, the government would not be chasing after a paltry GHC 6.9bn when it can make more from internal controls and discipline.

Signed

Issifu Seidu Kudus Gbeadese

(Executive Secretary-Baskin Africa)

Contact: 0244198031



 

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