Minister for Information Kojo Oppong Nkurmah has ruled out suggestions that the electronic transfer levy (e-levy) has failed and should be scrapped following the request for help from the International Monetary Fund (IMF).
According to him, although the government had earlier insisted that seeking a bailout from the International Monetary Fund was not an option, it had no choice but to take the decision.
In an interview on the Citi Breakfast Show with Bernard Avle, Mr. Oppong Nkrumah said the E-Levy, which was government’s solution to Ghana’s economic crisis, has not done as well as expected so far because it has faced stiff opposition.
He explained that the tax, just like any other revenue generation measure, will need to be given time to be widely accepted, hence the need for government to take the immediate action to alleviate the suffering of Ghanaians while the home-grown solution gains momentum.
“Whenever you introduce a revenue measure, it takes a while for it to hit its optimal level. More so, the E-Levy has had some loopholes that have to be plugged out by the GRA. The Levy has been heavily bastardised, and so people try to avoid it, and so we are unable to get the full value of what we are looking for. We will have to give it room to reach its optimal level. While at it, we cannot wait for it to reach that maximum level because we have obligations to meet.”
Kojo Oppong Nkrumah further assured that the government will negotiate to protect the best interest of the public when it meets with the team from the IMF on Wednesday.
This comes after claims that some flagship programs and employment to the public sector will be stopped as part of the conditionality the IMF will table.
The Ministry of Information on Friday, July 1, 2022, announced that President Akufo-Addo had given approval for Ghana to begin engagements with the IMF for a bailout. The ministry said the Minister for Finance, Ken Ofori-Atta will be leading the negotiations with the IMF in the coming days.
The news has been received with mixed feelings, as it comes as a major U-turn by the government after it vowed not to ever go under an IMF programme.
Ken Ofori-Atta said the government was settling for a homegrown policy instead of an IMF programme.
The homegrown programme included the introduction of the E-levy, which has fallen short of its projected revenue target so far.