E-Levy Technically Approved – Majority Leader

Osei Kyei-Mensah-Bonsu

Majority Leader and Minister for Parliamentary Affairs, Osei Kyei-Mensah-Bonsu, is insisting that the Electronic Transactions Levy, popularly known as E-Levy, has been technically approved by Parliament due to the passage of the Appropriation Bill and the 2022 Budget approval.

“On three levels, we have passed the E-Levy. That is because it formed part of the budget. We approved of the budget and by extension of reason, the E-Levy,” he said.

The experienced MP for Suame in the Ashanti Region explained the ‘passage’ as saying that receivables expected from the E-Levy were factored into making the estimates for the appropriation for 2022 which has since been approved.

“Then we came to do allocations to all the sectors fed by receivables from the E-Levy and we approved of them by the entire House, and finally the Appropriations Act, which is why I am saying that I find it extremely difficult for anybody to say, having done or taken these three steps, I am now tracing my steps back to say that I can’t support it,” he stated.

The Majority Leader told DAILY GUIDE exclusively that, “We will certainly have to find a way about it because it is already in the budget that we have approved.”

E-Levy Fears

The 2022 Budget, which captured the E-Levy expected to be at the rate of 1.75%, when approved, has been the main concern of the NDC who are claiming that the fiscal policy when allowed to be passed, has the capacity to bring in more revenues to enable the NPP government to fulfil its manifesto promises and at the same time dwindle the fortunes of the NDC by 2024 when the country goes for general elections.

As a result, there have been at least two brutal fights among the MPs on the floor of Parliament over the passage of the 2022 Budget because of the E-Levy component.

Finding Solution

“We really need to give it some consideration. I think that the House must pass it,” the Majority Leader insisted, and continued that “You (referring to the Minority) agreed and approved at that level by voting for them, then the Appropriations Bill which encapsulates all the allocations of revenues and expenditures received unanimous acceptance and approval by the House. That has been done.”

“Because the E-Levy is not already in place, it was fed into the budget which we have approved, what is left now is to use legal means to introduce the E-Levy Bill, the takings of which have found expressions in the budget approved,” he said, adding that “How does anybody then say that I don’t want to approve of the law? That is the difficulty that I have. You noticed that initially my colleagues (referring to the Minority) said they had zero-tolerance for the levy – they will not accept it.”

The Majority Leader said “but gradually, they are moving on a bit and they are saying that we can do 1%. We really need to continue with the dialogue and I believe we will be able to build consensus on this.”

Regretting Blows

The Leader of Government Business said what did not go right is the degeneration of the consideration of the budget into fisticuffs, saying that it was “most unnecessary because in Parliament we debate issues; we try to build consensus on most things and matters that come before us.”

He said “but if there are areas where people may disagree, we disagree from the point of view of deep knowledge. You put your case across and I will put mine across and if you are convinced and persuaded by what I am saying, perhaps you will give in.”

“If the person says that no, this is a matter of policy for my party; even though I appreciate the point you are making, unfortunately I am not able to go with you. What then should happen is for us to take a vote,” he explained, adding “and in the taking of the vote, should it result in blows?” “It should certainly not result in exchange of blows which is why I think what happened is most unfortunate, but we will work to improve our performance, broaden and deepen consultations, and bring as many people as possible on board,” he assured.

Other Views

He said some people had called on the government to look at areas of expenditure and cut those considered as frivolous.

“Other people think that please government, look at areas of expenditure you can cut. You can cut those frivolous expenditures that you are embarking on. If there are any such, yes, we can cut them out, but we need to also do introspection to reflect on the fact that where we are now, borrowing heavily, externally is not a good option,” the Majority Leader stated.

He told DAILY GUIDE that some Ghanaians have been urging the government to do “serious introspection within where we can get money from. Government looks within and says to us that I have noticed that this is an area that I can have some money from, to build the economy and you say you don’t want it. It is a difficulty.”

Transaction Rates

The Parliamentary Affairs Minister acknowledged that payment of taxes has never been easy on the part of any individual, but indicated that in the same vein the government needed the revenues to accelerate the development of the country.

“Let us look at it. Is it possible to reduce it (rate of E-Levy) a bit? And if it is not, the government must come clean on that,” he noted.

E-Levy Compromise

When asked whether there will be a reduction of the E-Levy rate, Mr. Kyei-Mensah-Bonsu said he could not speak to that.

“Already, the rate that has been imposed is 1% in and 1% out which is 2% and the government is introducing 1.75% on top of that. You are aware the telcos have reduced their own takings by 0.25%. So that being the case, is it possible to look at other areas to further bring down the charges on the transactions,” he said.

For him, these are matters that may come from the Finance Ministry, saying “we are still discussing at the cabinet and the [Finance] Minister is pursuing his own effort.”

“I told you that people were concerned about the overall impact of the levy on the economy and pockets and that far, when we thought that it was going to be 3.75%, fortunately, the Minister’s dialogue with the telcos succeeded in getting the telcos to reduce theirs by 0.25%.”

“What it means is that the overall impact is no longer going to be 3.75%, but 3.5%. Is it still possible for the Minister to continue his dialogue with other stakeholders (vendors and platform operators) to bring the rate down?”

“The vendors are also taking 0.5% which they are sharing at both ends. Is it possible to engage them to bring theirs down a bit?” he asked rhetorically.

E-Levy Potentials

According to him, these are matters that should really be of concern to all Ghanaians since the electronic transaction remains a potential arena to the nation to raise income domestically, saying “if you go to Dubai which has a population of three million, transactions give them so much every year.”

“Somebody told me it is $15 billion and an insider that I spoke with said the $15 billion is an exaggeration and that usually it is around $5 billion.”

“$5 billion from electronic transactions is huge. Our population is more than10 times that of Dubai, and if we are able to get $5 billion (assuming $5 billion is the rightful amount) then it means that we have the potential to earn more,” he said, adding “or even if the state is getting half of what Dubai is getting, I believe we will be able to do so much with it. $2.5 billion will translate to GH¢15 billion and that will be colossal. We need these monies to pay our contractors and all that.”

He noted that when people say they are not seeing much with government initiatives, they are referring to physical infrastructure which is capital intensive.

He, however, said that the government had achieved a lot and pointed to the revival of the National Health Insurance Scheme, Free SHS, One District, One Factory (1D1F), and other flagship programmes of the government as helping to accelerate development