Accounting and auditing firm, PwC, has reminded the government to review the rate for the Electronic Transaction Levy (E-levy) to not more than 0.75 per cent and its implementation also reviewed.
This according to the firm, is due to the downward adjustment of the e-levy revenue target by over 91 per cent, from ₵6.9 billion to ₵0.6 billion.
“The downward revision of the e-levy revenue target by over 91 per cent (from ₵6.9 billion to ₵0.6 billion) indicates the need for a review of the policy and its implementation. We wish to remind government of our call for the e-levy rate to not exceed the rates typically charged by resident platform operators of not more than 0.75 per cent,” it said.
In its commentary on the 2022 Mid-Year Budget, PwC said while the benefit of increased global oil prices had helped to support the budget in the short term, the fundamental and perennial challenge around revenue mobilisation, and the need to significantly improve the country’s tax to Gross Domestic Product (GDP) ratio persists and still needed to be confronted.
“This, in our view, continues to be the driver for the additional revenue measures, which the government has indicated it will pursue in the second half of 2022,” it said.
The previous revenue and grants target of GH₵100.5 billion for 2022 has been revised to GH₵96.8 billion, a 3.7 per cent reduction. This still translates into a growth target of 37 per cent relative to the 2021 performance (GH₵70.9 billion).
PwC said the revised target was expected to be achieved mainly as a result of the windfall in revenue from oil production and exports, a result of increased global oil prices.
This it believed would help to significantly offset shortfalls from other revenue sources, particularly tax revenues.
It is also expected to enhance government’s fiscal consolidation programme.
Given that government’s engagement with the International Monetary Fund has only just commenced, PwC, said it is too early to expect a detailed plan for the recovery of the economy in the medium term.
“It is therefore not surprising that the mid-year review does not provide such a plan; however, the review makes it clear that any eventual agreement with the IMF will be based on an Enhanced Domestic programme that will complement the previously announced Ghana COVID-19 Alleviation and Revitalisation of Enterprises Support (CARES) “Obaatan Pa” programme”.