Economist and Professor of Finance at the University of Ghana, Godfred Bokpin

Finance and Economics lecturer, Professor Godfred Bokpin, has expressed worry about the passage of the Electronic Transaction Levy (E-Levy), saying, it will increase the cost of doing business and undermine the private sector ability to create jobs.

According to him, the E-Levy is a lazy way of collecting taxes, adding, there are too many indirect taxes already overburdening businesses and consumers.

Speaking at a roundtable forum organised by the Institute of Economic Affairs on the topic “Ghana’s Current Economic Crisis: Is it Time to go to the IMF or is There an alternative Way Out?, Professor Bokpin said “given the effect of COVID-19 pandemic on the country post COVID-19, the economic reform must embrace a tax structure that is more equitable and progressive. And the reason, the e-levy cannot be supported and should not be supported is because it’s a bit more regressive and doesn’t help and very soon”.

“The litany of indirect taxes contribute to the high productive course-base of doing business in this country and undermines private sector leadership in creating jobs and wealth for Ghanaians. There are more realistic ‘low hanging fruit’ that we can do to close the leakages in our revenue envelope. And studies exist including some done by the IEA that Ghana lose as much as we are able to collect by way of tax revenue; we cannot allow those leakage to continue”, he explained.

“Of course, we have to talk about the exemption bill that needed to be passed, and I’ve been wondering that if we had applied the same energy with which we had passed this E-Levy, we could have made some gains. because in 2019 during the State of the Nation Address, our President [Akufo-Addo} told us that the number one threat to Ghana’s revenue base is not E-Levy, but rather exemptions”, he added.

Professor Bokpin also expressed worry that the country loses about 15 billion annually to tax exemptions. He therefore wants the nation to improve compliance and efficiency in tax collection in order to improve the tax to Gross Domestic Product (GDP) ratio from 13.5 percent to about 16%.

“If you look at the mathematics, even with the current GDP numbers, we are losing between 15 billion and 25 billion. Why would you buy pass all of these and tax peoples savings through E-Levy. I mean the state cannot be hiding somewhere and when it sees that money has passed somewhere, the state will go after it”.

“I mean, the state cannot set up the citizens to fail. If we continue like this there is no way the average Ghanaian can accumulate savings to take advantage of the limited economic opportunities…we can’t continue to do that.