The E-Levy rate should be reviewed downwards to increase adoption and rake in more revenue for the country, the Director of the Institute of Statistical, Social and Economic Research (ISSER) of the University of Ghana, Professor Peter Quartey, has suggested.
He said the rate of the levy should be reduced from the current 1.5 per cent to 0.5 per cent or 0.75 per cent.
Prof.Quartey gave the suggestion during a presentation on the 2022 Mid-Year Budget Review.
The ISSER Mid-Year Budget Review programme provides opportunity for the Institute to explain the budget and state the Institution’s position on it to inform policy making and public discussions.
The programme was sponsored by Agricultural Development Bank and Stannic Bank Ghana.
There are calls from the public for the E-Levy to be reduced to provide financial relieve to businesses and the general public.
Prof.Quartey said it was better for the government to reduce the rate of the levy than the current exemptions where transfer between accounts owned by the same person, transfer for the payment of fees and charges and transfer between principal, agent and master-agent accounts were free.
He said the reduction in the rate would motivate more people and businesses to use the service and that would bring in more revenue for government.
Prof.Quartey said the current rate of the E-Levy was a bother to businesses and individuals, adding that the current rate people and businesses would prefer using cheques and cash for payment than E-Levy.
Prof.Quartey said the E-Levy was a product to be used by the public and should be affordable.
“My basic economics tells me that if you are pricing a product which has a substitute, your pricing has to be lower. If you pitch too high people can use the substitute, and in the case of E-Levy, people can use cash or cheque for payment,”he Director of ISSER said.
Currently the E-Levy has yielded GH¢611 million against the government target of GH¢6. 9 billion.
Prof.Quartey entreated the government to pursue strategies to increase the country’s exports to rake in more foreign exchange.
To this end, he said the government should support the agriculture sector to thrive.
Touching on the current challenges the Ghanaian economy was going through, Prof Quartey partly attributed it to the Russia-Ukraine war.
“The Russian-Ukranian war has compounded the challenges posed by the COVID-19 pandemic,” he said.
Prof.Quartey suggested for the structure of the economy to be changed from export of raw materials to production and value added products for export to rake in more revenue and foreign exchange.
That, he said, would position Ghana to be resilient and withstand future global shocks.
BY KINGSLEY ASARE
