The Minority in Parliament has served notice it will not support the government with the introduction of the Electronic Transaction Levy (e-levy), popularly referred to as Momo tax.
Presenting the 2022 Budget Statement and Economic Policy of Government to Parliament last week, Minister for Finance Ken Ofori-Atta announced that electronic transactions covering mobile money payments, bank transfers, merchant payments, and inward remittances will be charged at an applicable rate of 1.75 percent, which shall be borne by sender, except inward remittances, which shall be borne by the recipient.
The move, according the Finance Minister, is to significantly increase tax revenue by bringing into the tax bracket, transactions that could be that could be best defined as being undertaken in the “shadow economy”.
However, the Minority Caucus, claimed they have not been able to build a national consensus on the matter, especially when Vice President Dr. Mahamudu Bawumia reportedly has questioned why the ordinary poor Ghanaian’s mobile money transactions should be taxed.
Minority leader Haruna Iddrisu issued the warning on Saturday at a post-budget workshop for Members of Parliament in Ho.
He queried whether the status of the ordinary people has changed so significantly above the ordinary to warrant the government imposing the e-levy.
The Minority Leader who is also the Member of Parliament (MP) for Tamale South, argued that the introduction of the e-levy is a huge concern because not only will it burden an already impoverished Ghanaian society but will also be a disincentive to the growth of a digital economy in the country.
“And we are convinced that the e-levy must well be a disincentive to investment, and a disincentive to private sector development in the country.
“We are unable to build a national consensus on that particular matter because to paraphrase Vice President Mahamudu Bawumia ‘Why tax ordinary poor people.’ Since when have they become above ordinary people for momo to be taxed and for banking to be taxed,” he questioned.
Mr. Haruna Iddrisu also expressed concern whether Ghana is not already traipsing the path to economic crises with the mounting public debt that has reached such unsustainable levels.
The Minority Leader said as a nation there is a need to understand the road to recovery considering the current financial situation and the public debt.
He disclosed that in 2016 the amount of money the government spent on debt servicing was about GH¢10.4 billion, rising to GH¢16 billion in 2019 and to GH¢21 billion in 2020 and projected to close the year at GH¢35 billion.
According to him, the Finance Minister has announced a debt to GDP ratio of 77% at GH¢335 billion while rating agencies like Moody’s and Fitch have estimated it to end the year with 81% of budget deficit.
He argued that in an effort to redeem the tumbling economy the Finance Minister is seeking to introduce measures, which unfortunately include the e-levy or the MoMo tax.
