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Former Finance Minister, Seth Terkper, has indicated that the electronic Transactions Levy (E-Levy) that the Akufo-Addo government is bent on foisting on Ghanaians would be a double whammy because Ghanaians are already paying the Communication Service Tax (CST).
The CST was introduced in 2013 by the government.
“All the telcos attract VAT, whether the VAT is sound or not, businesses pay and these elements go into consumption tax already. So, that’s the point that we’re making and the basis on which some of us think that the E-Levy needs a rethink,” Terkper explained.
“CST is a service tax and is a consumption tax because ultimately it is consumers that are going to pay. Even though it is businesses that are supposed to pay, it’ll be pushed to the consumer.”
Mr. Terkper made these comments at a 2022 Budget Review organised by PFM-Tax Africa Network in a virtual meeting on Wednesday (24 November).
His comment comes in the wake of a stalemate over the e-levy with the Minority in parliament making it clear they are opposed to the tax while the government says the levy is a lifeline to the economy that needs to be approved.
The CST was introduced by the Mahama government in 2013 to shore up revenue through the taxing of Ghanaians for communications services.
In 2020, the Akufo-Addo government reviewed the tax downwards as part of moves to mitigate the impact of the COVID-19 pandemic.
Mr. Seth Terkper argues that both the CST and the e-levy are serving the same purpose.
He calls for a proper rethink of the e-levy, saying its target, especially mobile money operations, may be counterproductive since the mobile money sector is a relatively young industry.
Under the controversial e-levy, “Electronic transactions covering mobile money payments, bank transfers, merchant payments and inward remittances will be charged at an applicable rate of 1.75% which shall be borne by the sender except for inward remittances, which will be borne by the recipient.”