A former Deputy Finance Minister, Dr Alex Ampaabeng, has expressed satisfaction with the abolition of the Electronic Transaction Levy (E-Levy).
According to him, the tax was distortionary and not fit for purpose.
Dr Ampaabeng made these remarks on Accra-based Channel One TV, highlighting the pledge of the 2024 New Patriotic Party (NPP) presidential candidate, Dr Mahamudu Bawumia, to scrap it.
He further described the E-Levy as a “money transportation tax,” deducting charges on money transfers without adding economic value.
However, he acknowledged the revenue gaps the removal would create, urging the government to find sustainable alternatives.
“We don’t have anything against the removal of the E-Levy. We are already in the financial year, and it was going to happen. This has been in their manifesto, and we also had it in our manifesto that we were going to remove it.
“It is a distortionary tax, so I have no qualms about the removal. It will only create a loophole, and how to fix the loophole should be the conversation. But as a tax expert and someone who understands the distortions such taxes create, I am happy it is gone,” he stated.
The former minister further proposed a shift towards e-commerce taxation as a more effective way to broaden the tax net.
“Electronic-based taxation or e-commerce taxation is the angle to take. I was hoping that this government or future governments would look at it as part of broadening the tax net, taxing digital market players, which is part of electronic transfer taxes but not in the form of the current E-Levy,” he suggested.
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