General Secretary of the largest opposition National Democratic Congress (NDC), Johnson Asiedu Nketia, has described the NPP government as very insensitive over the latter’s introduction of a mobile money and other digital transactions tax in the 2022 budget.
The former legislator was also unhappy about the abolishing of road tolls on the various public roads across the country.
Speaking on Okay FM’s Ade Akye Abia programme, Mr Nketiah indicted the government for non performance, saying the current administration lack ideas to generate income for the economy and is rather using unconventional approach which will impact negatively on an already over-burdened Ghanaian.
“When they mentioned that they are scrapping road tolls, I said that there’s something bigger, something unpleasant that they are bringing on board,” indicating: “MoMo is now the game of the day, it penetrates to the rural areas, the unbanked population; they use MoMo, so, if you are taxing that one and you’re rather cancelling road tolls whose incidence falls on vehicle owners, it means that it is not a pro-people budget at all.
“You don’t maximise revenue at the expense of people who are overtaxed.
“I believe the next NDC government will do much better by retaining tax on road tolls which is fundamental. Road tolls in which the rich people in the country pay, the government has abolished the tax on it and imposed tax on the poor MOMO users,” he stated.
1.75% Momo Levy
Mr Ken Ofori-Atta, the Finance Minister, during the 2022 Budget Statement presentation in Parliament on Wednesday, said effective January 1, 2022, the Government would impose a 1.75 per cent levy on mobile money and other digital transactions, with exemptions on transactions that add up to GHC 100 or less a day, approximately GHc 3,000 a month.
Mr Ofori-Atta explained that the upsurge in the use of e-payment platforms as a result of the COVID-19 pandemic, has been an impetus for the introduction of the levy.
As a result, Ghana recorded a total GHS500 billion from e-transactions in 2020 compared with GHS78 billion in 2016.
He said: “It is becoming clear there exists an enormous potential to increase tax revenues by bringing into the tax bracket, transactions that could be best defined as being undertaken in the informal economy.”
He noted, therefore, that the government is charging an applicable rate of 1.75% on all electronic transactions covering mobile money payments, bank transfers, merchant payments and inward remittances, which shall be borne by the sender except inward remittances, which will be borne by the recipient.
“Mr Speaker, to safeguard efforts being made to enhance financial inclusion and protect the vulnerable, all transactions that add up to GHS100 or less per day, which is approximately GHS3,000 per month, will be exempt from this levy,” Ken Ofori-Atta told parliament.
He said E-Levy proceeds will be used to support entrepreneurship, youth employment, cyber security, road infrastructure, among others.
“Mr Speaker, this new policy also comes into effect once appropriation is passed from 1st January 2022. The government will work with all industry partners to ensure that their systems and payment platforms are configured to implement the policy,” he said.
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