Former Finance Minister, Seth Terkper

Former Finance Minister, Seth Terkper has added his voice to those who doubt that the Electronic Transactions Levy (E-Levy) would be able to rake in enough revenue to address the country’s economic challenges.

Government intends to pass the E-levy to be able to internally generate revenue to revive the ailing economy without resorting to the International Monetary Fund.

However, speaking on Upfront with Raymond Acquah on Thursday, Seth Terkper noted that the E-levy is a distortion of the country’s tax structure and would not achieve government’s target.

“E-levy taxes savings which is my basic and fundamental opposition to it. It tells you how dire the situation is for us. Ghana, wanting to tax savings, no, it is never done,” he stated.

He said the projections of proceeds from the levy have been exaggerated by the government, thus impossible to address the economic challenges.

 “I urge you to look at the appendix to the budget. The projections for the E-levy are there for the next four years…is that what is going to resolve the fact that we have to borrow to pay our debt and then even the interest on that debt? if you pay and after paying compensation is not enough, is that the solution to it? If you look at our re-financing is it a question of 7 billion? … I beg to differ,” he said.

According to him, the country’s economic problem is government’s expenditure.

“We have thrown all of these loans and oil revenue, levies and things at expenditure and still we are not getting any resolution. We need to re-finance,” he added.

Earlier, an Economist and Chairman of the National Development Planning Commission, Prof Stephen Adei, also suggested that the country’s expenditure be reduced.

“If you are exceeding your income, then you must accept to live below your income, which is the easy way, otherwise if you are earning GH¢3,000 and you are in debt of GH¢10,000 you cannot day to day spend GH¢3,000.

For you to get out of the rag, you will have to cut your expenditure to GH¢2,000 because you must service your debt. So we are in that situation as a country,” he said.

Meanwhile, the government is currently holding a crunch cabinet meeting to find solutions to the raging economic challenges.

The meeting, being held at the Peduase Lodge, is expected to end on Sunday, March 20, 2022.

The deliberations are being chaired by President Akufo-Addo. It is being attended by all NPP MPs, ministers, government appointees, and the governing New Patriotic Party (NPP) leadership.