Repeal of E. Levy by Parliament: Very good for the business community, as it will increase revenue generation for the taxpayer— Prof. John Gatsi
The Parliament of Ghana has passed a law repealing the Electronic Transaction Levy (E. Levy), a decision that has been met with exciting reactions from different sectors of society.
Professor John Gatsi, an expert in economics at Cape Coast University, has expressed his support for this legislative change, emphasizing that it is a positive development that will not only benefit businesses but also foster greater revenue generation for the government in the long run.
Introduced in 2022, the E. Levy was initially designed as a revenue-generating tool to help address the country’s fiscal challenges, especially during a period of economic strain. The levy imposed a charge of 1.5% on electronic transactions above a certain threshold, including mobile money transfers, bank transactions, and other digital payment activities. While the government aimed to generate additional funds through this levy, its impact was felt more acutely by businesses, especially small and medium enterprises (SMEs), which form the backbone of Ghana’s economy.
For businesses, the E. Levy was seen as an added cost in an already difficult economic environment. Entrepreneurs and business owners argued that the levy stifled growth, increased operational costs, and discouraged digital transactions, which are vital for modern-day business operations. Small businesses, in particular, found themselves struggling to absorb the additional costs associated with the levy, leading to calls for its repeal from various business associations and stakeholders.
Prof. John Gatsi, speaking on Kessben FM’s Maakye with Kwame Appiah Kubi said the repeal of the E. Levy is a significant step forward for the business community. He explained that the decision by Parliament comes as a huge relief to businesses that had long been burdened by the extra financial strain the levy imposed. He argued that with the repeal, businesses will now have more flexibility to invest in their operations, expand their digital services, and stimulate economic growth.
While the repeal of the E. Levy has been celebrated by the business community, some may question the impact this move will have on the government’s ability to generate revenue. Prof. Gatsi, however, believes that the government can still maintain or even increase its revenue generation efforts through alternative and more efficient means.
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