The Minority caucus in Parliament has vowed to kick against the government’s proposal for a 1.75% tax on all electronic financial transactions.

The Minority Leader, Haruna Iddrisu, reiterated this during the the Post-Budget workshop in Ho on Saturday.

According to him, the tax is a disincentive to investments and private sector development.

Haruna Iddrisu said the tax will overburden Ghanaians.

“Our concern is whether the e-levy itself will not be a disincentive to the growth of a digital economy in our country. We are convinced that the e-levy may as well even be a disincentive to investments and private sector development in our country… We in the Minority will not support government with the introduction of that e-levy. We are unable to build national consensus on that particular matter,” he said.

The 1.75% tax on electronic financial transactions was proposed in the 2022 budget statement presented before Parliament by the Finance Minister, Ken Ofori-Atta on Wednesday, November 17, 2021.

The Minister explained that the tax measure was to raise revenue to support the job creation initiatives, construction of road infrastructure, cyber security, and digital infrastructure.

“Mr. Speaker, following this observation, there exists significant potential to increase tax revenues by bringing into the tax bracket, transactions that could be best defined as being undertaken in the “shadow economy… After considerable deliberation, Government has decided to place a levy on all electronic transactions to widen the tax net and rope in the informal sector. This shall be known as the “Electronic Transaction Levy” or “E-Levy”.

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“Electronic transactions covering, mobile money payments, bank transfers, merchant payments, and inward remittances will be charged at an applicable rate of 1.75 percent, which shall be borne by the sender, except inward remittances which will be borne by the recipient,” Ken Ofori Atta announced..

Ken Ofori-Atta was hopeful that the proposal will come into full force from February 2022.

Various stakeholders including those in the telecommunications sector have also raised concerns about the policy.

Government in response is expected to engage the telcos on the policy.