Food and Agriculture Minister, Dr. Owusu Afriyie Akoto says farmers risk subsidies on seeds and fertilisers if the controversial Electronic Transaction Levy (E-Levy) is not passed.

According to the Minister, the levy is necessary due to the dwindling economy which has caused the government to look for alternative sources of revenue to close the gap hence the Electronic Levy.

“Now with the price increases in the world market, we are also facing problems with revenue collection on Ghana and everywhere else because international trade has also shrunk and we get most of our revenue from international trade, import and export that is why it has become necessary for this government to look for alternative sources of revenue to close the gap. and hence the electronic levy.

“The opposition is making the electronic levy a big issue. What they don’t know is that it is affecting other areas. So if we are to remove the levy, where are we going to find the money to give subsidies to the farmers? There will be nothing”, he said.

About E-levy

Finance Minister Ken Ofori-Atta, presenting the 2022 budget on Wednesday, November 17, announced that the government intends to introduce an electronic transaction levy (e-levy).

The levy, he revealed, is being introduced to “widen the tax net and rope in the informal sector”. This followed a previous announcement that the government intends to halt the collection of road tolls.

The proposed levy, which was expected to come into effect in January, 2022, is a charge of 1.75% on the value of electronic transactions. It covers mobile money payments, bank transfers, merchant payments, and inward remittances. There is an exemption for transactions up to GH¢100 per day.

Explaining the government’s decision, the Finance Minister revealed that the total digital transactions for 2020 were estimated to be over GH¢500 billion (about $81 billion) compared to GH¢78 billion ($12.5 billion) in 2016. Thus, the need to widen the tax net to include the informal sector.

Although the government has argued that it is an innovative way to generate revenue, scores of citizens and stakeholders expressed varied sentiments on its appropriateness with many standing firmly against it.

Even though others have argued in support of the levy, a section of the populace believes that the 1.75% e-levy is an insensitive tax policy that will deepen the already prevailing hardship in the country.