Economics Professor at the University of Ghana Business School, Lord Mensah has disagreed with calls for the scrapping of the e-levy since the government announced an IMF programme.

Speaking on Top Story, Tuesday, Prof. Lord Mensah explained that the levy could play a major role in Ghana being provided the required support from the Fund.

“The e-levy is going to be a tracker on the table in engaging the IMF, because when the IMF comes in, they may have to look at the country’s position in accepting some of the conditions they would give. I believe this government knows very well that the e-levy is going to play that role,” he said.

He noted that the Fund back in 2011 and 2015 asked government to revise and introduce some tax measures. Thus, he doubts if the Fund would encourage the scrapping of the levy.

Prof. Lord Mensah believes the government knew how important the levy could be in their achievement of the IMF support programme.

This, he said is the reason government has announced an IMF bailout despite its earlier claim.

“That is why they ended up with IMF even though the political packaging was that if we take the e-levy, we may not go to IMF. But that was not the case, it was a third choice they gave us which is going to be the both of them and e-levy is going to play a major role in the IMF programme this time around,” he told Evans Mensah.

Earlier on Tuesday, the Finance Ministry disclosed that government will not terminate the 1.5% levy on electronic transactions, despite its application to the International Monetary Fund (IMF) for economic assistance. This followed calls by critics for government to scrap the levy.

This was contained in a statement from the Ministry on Tuesday, addressing key questions regarding government’s ongoing engagement with the Fund.

Regarding the controversial levy, the Ministry explained that government will add the proceeds from the levy to the support received from the IMF to salvage the economy.

Addressing the question of whether the levy will be scrapped, the Ministry said, “NO. The IMF lending to Ghana will be for balance of payments support (i.e. to shore up the international reserves).

“Government is committed to ensuring the smooth operationalisation of all taxes including the e-levy to ensure that in addition to the IMF’s resources, government can continue to support its developmental goals on its own while ensuring that tax-to-GDP ratio increases to the peer range of 16%-18%”.

https://www.myjoyonline.com/e-levy-will-not-be-scrapped-despite-imf-bailout-government/

It continued: “An IMF-supported programme is likely to encourage the government to investigate the factors hindering the success of the e-levy (including by providing technical assistance if needed) and come out with strategies to improve it”.

By this information, Ghanaians will continue to pay the levy, despite the widespread public angst against the policy.

The tax initiative, which was rolled out on May 1, has however failed to generate the projected revenue for the government.

According to a leading member of the governing New Patriotic Party, Gabby Otchere-Darko, the tax has only generated less than 20% of its targeted returns.