The Director of the Institute of Statistical, Social, and Economic Research (ISSER), says there is a significant 58% deviation from the E-levy revenue targets during a pre-budget conversation on Joy FM’s Super Morning Show.
Prof Peter Quartey’s revelation follows ISSER’s recent report on the Ghanaian economy, released on October 31, 2023, which delved into the effectiveness of the E-levy, sparking crucial questions about the optimal rate for this digital tax.
The report highlights that the reduction of the E-levy rate from 1.5% to 1% in January 2023 initially led to a decline in alternate payment systems’ usage.
However, the figures sharply rebounded in February, indicating a potential short-lived impact of the rate adjustment.
The report raises concerns about whether the current E-levy rate is optimal, considering the fluctuating patterns in alternate payment systems.
Notably, the ISSER report goes beyond Ghana, offering a broader perspective on tax policies. It underscores that in various countries examined, anticipated revenues from taxes failed to materialize, emphasizing the importance of tax rate optimization.
The report serves as a critical resource for policymakers, urging a reconsideration of the E-levy rate to strike a balance between revenue generation and maintaining consumer engagement in taxable transactions.
Professor Quartey concluded the discussion by expressing discomfort with the lack of real-time data, hindering academics’ ability to make informed suggestions for effective policy implementation.
This underscores the challenges faced in navigating the evolving landscape of digital taxation and the pressing need for timely and accurate data to inform policy decisions.