The Ranking Member on Parliament’s Finance Committee, Cassiel Ato Forson, has cautioned that efforts to transform the economy into a cashless one will be erased if government implements the electronic transaction levy.
The Finance Minister, presenting the 2022 Budget Statement and Economic Policy to Parliament on Wednesday, November 17, 2021, announced the introduction of an Electronic Transaction Levy, also known as an E-Levy, to increase tax revenues for the country.
“The government will charge an applicable rate of 1.75% on all electronic transactions covering mobile money payments, bank transfers, merchant payments, and inward remittances, which shall be borne by the sender except inward remittances, which will be borne by the recipient,” Ken Ofori-Atta announced.
But Cassiel Ato Forson believes that the move is counter-productive to plans aimed at making the Ghanaian economy cashless.
According to him, Ghanaians would be compelled to carry out transactions using physical cash.
“This budget is going to erase the cashless economy we are talking about. People are now going to keep their monies at home. People are now going to trade with cash because any transaction you engage in with the bank, you are going to pay a digital tax.
Today, we are confronted with the situation that the very thing we are doing to help the cashless economy, today, we are erasing all of that. I am sad as a Ghanaian,” Cassiel Ato Forson told host Evans Mensah on Joy FM’s Top Story on Wednesday.
The former Deputy Finance Minister added that the decision will also have far-reaching consequences on businesses.
“These taxes are going to introduce distortions in the economy. Businesses are going to suffer. Companies deal with transfers and these transfers will increase their cost of doing business because every transfer the company does, they are going to pay 1.75%
This cost is going to be passed on to their clients. It will go on and on and it will create distortions within the economy. It will go to the extent that the government will not get the money,” Cassiel Forson added.
He says that the Minority in Parliament will not approve the levy.
Dr. Forson insists that the Minority Caucus will reject any tax introduced to worsen the hardships faced by Ghanaians.
Earlier, the lawmaker criticised the government for reversing the benchmark value on selected imported goods.
He expressed worry about the prospects of prices of essential imported commodities increasing.
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