Ghana’s Finance Minister, Ken Ofori-Atta has been advised to consider going to the International Monetary Fund (IMF) for support following a fierce opposition by minority MPs to get the controversial Electronic Transaction Levy (E-levy) passed in parliament.
That’s according to a former New Patriotic Party MP for New Juaben South, Mark Assibey-Yeboah.
The levy when passed will help fix the country’s dwindling revenues which has been impacted by COVID-19. The governing party has indicated that despite the crisis, it will not resort to the IMF for a bailout but will prioritize domestic revenue generation through the E-levy.
But Mr. Assibey Yeboah, who was a former Chair of the Finance Committee of Parliament maintains that the government’s insistence on passing the Electronic-Transaction Levy to shore up its revenue target is not right given the existential economic challenges.
“Without a doubt, I think we should be placing a call to Washington if we haven’t really done that. We are just not going to ask for the funds just because E-levy has been passed or not. E-levy will just bring about GH¢5 billion. We are in a deep hole of our tax revenue and facing difficulties, so going to the Fund will give us some support.”
“So there is nothing wrong with going to the Fund. Ghana is a member of the IMF so what is wrong going to ask for support when we are in difficulties to go and pool resources. If I was the finance minister, I will be convincing the President that it is about time we went back”, Yeboah told Citi FM.
Revenue can’t be realized
Dr. Mark Assibey Yeboah also added that the revenue expected to be accrued from the E-levy is insufficient to the extent that, it will not be able to ensure the economic stability government is eyeing.
“The GH¢6.9 billion target cannot be realized. There are a lot of exemptions so, in my estimation, the maximum amount we can get from the E-levy is GH¢5 billion, and that is less than a billion dollars, so I do not think that the E-levy is going to be a panacea to our revenues. Going to the IMF will ensure some stability and above all, we are going to get some $3 billion”.
Lazy approach
Mr. Yeboah’s comments appears to corroborate earlier pronouncements made by experts in the financial sector.
Renowned Economist, Kwame Pianim has described the E-levy as a lazy approach to mobilize revenue.
“It is a lazy way of sitting in the air conditioning in Ministry of Finance and saying, ‘Oh I want money, oh let me grab this.’ The Ministry of Finance is not a budget and expenditure ministry; it is for development, it is for finance. So you are looking at what will grow the economy, not what will give you money …”, he said on Asaase Radio’s Sunday night.
Pianim called on the government to cut down on its expenditure and find other, innovative ways of raising revenue.
SOURCE: DAILY MAIL GH; Citinewsroom.com contributed to this story
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