Bussiness
E-levy too insignificant to close deficit gap, find better ways – Terkper
Seth Terkper, former Finance Minister, has waded into the raging debate over the Electronic Levy (E-levy) introduced by government in next year’s budget – saying, given the deficit at hand, the levy won’t contribute significantly to addressing the revenue shortfall; hence, better policies and strategies are needed.
Government has projected a deficit of GH¢37billion by end of 2022, as revenue is targetted at GH¢100.5billion against expected expenditure of GH¢135.6billion. Meanwhile, the E-levy is expected to rake in only GH¢6billion.
Mr. Terkper, in an interview with the B&FT, said considering the deficit gap and how much the E-levy is expected to bring in, introducting the tax would just be a distortion. Therefore, the broader issue should focus on how the huge deficit gap can be closed.
“The issue should be how we are going to finance the deficit. The GH¢6billion from the E-levy is a drop in the ocean because we are looking at financing GH¢37billion. So, inasmuch as the E-levy debate is on, government should answer the bigger question about how – without going to the market – it will finance the last quarter.
“The E-levy is not going to significantly reduce the deficit; it is only going to cause distortion. It is going to cause a burden to businesses and consumers in terms of increment in prices and inflation,” he said.
He further expressed concern about the back and forth between the minority and majority groups in Parliament regarding the budget approval; saying the situation may escalate into a government shut-down if both sides of the House do not come to a quick conclusion in the matter.
“The time to pass the 2022 Budget – December 31, 2021 – is approaching fast and could make a government shutdown a reality; and Cabinet and Parliament must work expeditiously on a strategy or plan of action for revenue, expenditure, borrowing/loan and real sector initiatives.
“A stalemate in Parliament on economic policy continues, the clock is ticking on detailed consideration of the estimates and policies of sector ministries – and poses major fiscal risks of non-passage of budget and closure of government for lack of authority to disburse Consolidated Fund inflows,” he said.
The E-levy debate
reviously, the minority in Parliament held the position that the E-levy would take the country backward by affecting small businesses and individuals, especially the poor. This led to some controversies in the House, leading to rejection of the budget on Friday, November 26, 2021 after the majority in Parliament walked out. But on Tuesday, November 30, the decision was revoked by the majority in Parliament after the minority also walked out.
However, the Minority Leader, Haruna Iddrisu, has departed from his side’s original stance to reject introduction of the Electronic Levy (E-levy) in its entirety – saying they will agree if it is slashed to 1 percent with a threshold of GH¢300.
The Minority Leader said this was arrived at after extensively engaging Finance Minister Ken Ofori-Atta on the matter. He said this at the Ghana Chamber of Telecommunications’ 10th-anniversary launch.
“A week ago, it was no, no, no [that] we won’t accept E-levy. But having listened to officials in government, including the minister for finance, I was convinced to accept a departure from my original ‘no’ to accepting a 1 percent E-levy for the good of the Ghanaian people.
“If government is able to make overtures and reach out and say ‘we want to peg the electronic levy at 1 percent’, I don’t have any difficulty convincing my constituencies. This should be our contribution to fiscal consolidation and our contribution to ensuring that the economy doesn’t collapse on any of us going into the future,” he said.
Source: ghanaweb.com
Bussiness
Ghana’s GDP shows economy is fast recovering despite DDEP – Finance Ministry
Ghana’s Gross Domestic Product (GDP) indicates a rapid economic recovery despite global challenges and ongoing debt restructuring, according to the Ministry of Finance (MoF).
The Ministry in a statement today indicated that latest data from the Ghana Statistical Service (GSS), cumulative economic growth for the second quarter (Q2) of 2024 reached 6.9%, a notable increase from the 4.7% recorded in the first quarter of 2024.
The MoF statement further noted that, “The economy’s robust recovery is in response to the macroeconomic stability and growth interventions that government is pursuing under our IMF-supported Post Covid-19 Programme for Economic Growth (PC-PEG).”
According to them, the overall real GDP growth for the first half of 2024 rebounded strongly, with year-on-year GDP growth averaging 5.8% for the period, significantly higher than the 2.9% recorded in the same period in 2023.
By Edem Mensah-Tsotorme
Read full statement below
Bussiness
Facebook, Youtube, online trading companies must be taxed – Deputy Finance Minister
The Deputy Finance Minister Dr Alex Ampaabeng, has proposed that online trading companies should be taxed to bolster the economy.
He noted that these companies, both local and international, generate significant revenue from their Ghanaian clients, which underscores the necessity for taxation.
In an interview with Bernard Avle on Channel One TV’s The Point of View, Dr Ampaabeng pointed out various potential revenue sources for Ghana, including online businesses and content creation companies.
He questioned why other national companies operating in Ghana are taxed, but social media platforms like Youtube and Facebook, which run numerous advertisements, are not included in the Ghanaian tax system.
According to him, these social media companies earn profits from the advertisements they display, and online trading companies also generate income from the sale of their products and services.
He mentioned online trading companies such as Jiji, Jumia, and Tonaton, which he believes surpass all physical marketplaces in Ghana in size.
According to him, “I can’t think of a country which has not gotten a digital service tax system of some sort, so Ghana is long overdue. Just to make an example so that people will appreciate where I’m coming from. Go to Youtube and play a video, within one or two minutes, you are going to watch about two, or three adverts.”
“What it tells you is that Facebook or Youtube is making profits right here in Ghana. Go to your Facebook account, and you are going to see a number of adverts on your right, left. What it is telling you is that Facebook is making profits right here in Ghana and not being taxed. Meanwhile, there are companies operating in Ghana, for jurisdiction reasons, of course, that are being taxed,” he said.
The Deputy Minister added that “So then, it comes to the question of the application of our tax laws. Revenues generated in Ghana are subject to taxes. We have Facebook, TikTok and all those players, these are digital platform owners.”
He stressed, “Then we have the digital or market players, here we are talking about individuals who are using the digital platforms. We have Jiji, Jumia, Tonaton, these combined, are bigger than all physical marketplaces in Ghana. And it tells you the volume of transactions, that are going on there.”
He expressed his hope that individuals earning online profits from Ghanaian residents would be taxed.
“There are conversations ongoing, I wouldn’t want to pre-empt anything, maybe in the future, it might not be anytime soon, what I would like to see, is a Ghana where people who are earning all forms of profits in the country are subject to taxes. People who are trading online to Ghanaian residents, people who are generating revenue from Ghana are allowed to pay taxes,” he noted.
Additionally, he proposed a collaboration with the government to curb cybercrime by registering and verifying these online trading companies.
“We can have a system where the government engages these operators, so individuals will submit their Ghana Card and are registered and verified,”he concluded.
Source: Citinewsroom.com
