‘Talk Tax’ was successful despite opposition, E-levy won’t fail either – Ursula
The Minister for Communication and Digitalization, Ursula Owusu Ekuful, says the e-levy will not erode the gains made in digital transactions as some have suggested.
She’s of the view that the government will raise adequate revenue from the e-levy for national development.
Speaking at the government’s first town hall meeting in the Eastern Regional capital, Koforidua on the controversial tax, she likened the public reaction to the E-levy to the Communication Services Tax (CST), arguing that despite the many criticisms and opposition to the CST, also known as ‘talk tax’, it was passed, and its results have been impressive.
She noted that although she was among those against the CST, she has now realized how helpful it has been and strongly believes that the E-levy will follow the same trajectory.
“Our collective experience shows that despite their initial opposition to many of these interventions [including the CST], they’ve proven to be worth the wait,” she said.
The Ablekuma West legislator appealed to the opposition National Democratic Congress, NDC, and the minority in parliament, to endorse the tax and cooperate with the government in getting it passed.
“I appeal to them [minority] to cooperate with government and work with us to pass this levy as well because ultimately, the result that we got from the Communication Services Tax, which clearly didn’t destroy the industry, will also be evident post-implementation of this levy as we all work collectively to enhance access to and use of digital platforms working with Ministry of Finance to ensure that digital financial services become the norm as we strive to become a cash-lite society.”
Ursula Owusu Ekuful noted that contrary to suggestions that implementing a tax on mobile money transactions will lead to many people moving to cash-based transactions, evidence from other countries such as Uganda show that after only a few months of reduced digital financial transactions, mobile money transactions bounced back to become the leading means of transactions.
“When a similar levy was passed in Uganda, transaction values reduced slightly upon the introduction of this levy, but they picked up almost immediately,” she said, adding that she is confident that Ghana will do much better.
The government has said that it will re-submit the Bill to Parliament, following the conclusion of extensive consultations on the controversial levy.
A section of the public including some civil society organizations has kicked against the government’s plans to introduce a 1.75% tax on electronic financial transactions of above GHS 100.
The imposition of extra taxes on telecom services in the country began in 2008 when the then government under the New Patriotic Party (NPP) insisted on imposing a six-cent tax on communications services.
The government then argued that the tax was intended as an excise tax to raise additional revenue from communications services rendered by mobile operators to their customers and to each other when dealing with calls from customers.
The National Democratic Congress (NDC) then in opposition argued against the tax insisting that it amounted to over-taxation.
In spite of the reservations raised, the NPP went ahead to pass the bill into Law to have what many described at the time as the ‘Talk Tax’.