The Head of Economics at the University of Ghana, Prof. William Baah-Boateng, has suggested to government to reconsider a one per cent levy on electronic transactions (E-levy) instead of the 1.75 per cent proposed in the 2022 budget and fiscal policy.
He explained that, the 1.75 per cent proposed levy has the risk of derailing the country’s digitisation drive if implemented in its current form.
Prof. Baah-Boateng said this Tuesday at the Ghana Employers Association’s (GEA) forum on the 2022 budget held in Accra.
Prof. Baah-Boateng also urged government to reconsider the 1.75 per cent levy and make it conform with the elasticity of demand, explaining that, “the higher the cost of a product, people are going to stop using it with time, but rather the figure should be in such a way the user would not feel its impact.”
He said the levy on electronic transactions was fairly new and the government should not rush in its implementation.
“The E-levy is an area with great potential, so the government should consider increasing it if possible after six months based on the how it performed”, he stated.
Prof. Baah-Boateng proposed to government to consider generating the rate based on a lump sum explaining that it could consider setting a cut off point for E-transactions.
Touching on the YouStart initiative, which aimed to support the youth to develop commercially viable businesses, he said, it would be prudent for government to select few entrepreneurs who would in turn employ the large number of youths.
“Over the years our entrepreneurial strategy has been to provide meager amount to a number of youth which does not take them anywhere. If we want everybody to be an entrepreneur, we will not yield anything and government should take a second look at this,” he stressed.
Prof. Baah-Boateng was of the view that in a country where all job seekers were being compelled to be entrepreneurs that country was bound to become a failed state.
This is because if all job seekers become entrepreneurs, “who will employ who.”
He said government should aim at a transformational kind of entrepreneurship which would empower individuals to employ a large number of youth.
The Chief Executive Officer of the GEA, Mr Alex Frimpong, said the association made policy recommendations to government on the concerns of employers to which some have been featured in the 2022 budget presented to Parliament last week.
The concerns, he said, included the macroeconomic environment, tax exemption bill, benchmark point value and the allocation of domestic credit to the private sector.
BY JEMIMA E. KUATSINU & JESSEL L.THERSON-COFIE