As Ghana’s economy reeled from the pressures of Covid 19 pandemic, rising cost of food and services , it became apparent that government needed additional financial support to shore up its burdens.
With rising inflation peaking at 23.6% in April 2022 coupled with a plunge in the strength of the cedi to the US dollar around the same time and escalating fuel prices occasioned by the Russia-Ukraine war, government was in a bind and hence planned to introduce another tax -e-levy.
The announcement of the tax was not received with opened hearts. Public dissension was at all time high. Polls conducted by civil society organizations to gather public opinions on e-levy showed a staggering majority of the good people of Ghana were against it. Discussions on the subject were unpleasant. Leading members of the opposition NDC sided with the public and urged the government to rescind its decision of introducing the e-levy but government would not budge.
Die-hard supporters of the ruling National Patriotic Party and government spokespersons on economic policies pursued public relation programs aimed at advancing strong arguments in defense of the levy. Many of them hinted that government needed to raise money internally to prevent the country from seeking IMF bailout a move they described as distasteful. The e-levy a 1.5% tax on electronic money transfer ended up passed by parliament and on 1st May 2022 it took effect.
Two and a half months after the introduction of the e-levy, the Ghana Revenue Authority reported that it had failed to raise the quantum of money government had projected. Government has now turned to IMF for a bail out.
The sequence of events casts doubts on government’s intentions. It is as though government knew it will definitely seek IMF bailout but skillfully sought to introduce another tax to raise some money before seeking help from IMF.
What should happen to e-levy now that government has gone for IMF bailout? Should Ghanaians still be made to pay e-levy? If President Akuffo-Addo truly loves Ghanaians and appreciates their burdens then he must scrap e-levy as a sign of good will towards them.
Will he do it?