Embrace E-levy, and VAT changes to rebuilding the economy

Dr. Adu Sarkodie, an Economist, urges Ghanaians to embrace the proposal of reducing the new electronic levy (e-levy) charge from 1.5 percent to 1 percent and the Value Added Tax (VAT) Rate of 2.5 percent as measures taken to revive the economy.


He explained that the government is in dire need of money as such, the proposals made while the Minister of Finance, Ken Ofori-Atta presented the 2023 national budget will serve as a short-term measure to bounce the economy back on a healthy foot


“The government is facing serious fiscal challenges. So, in my view, this VAT and the present state of e-levy will be the short-term revenue measures for the government, he opined.

Speaking on Citi TV, The Big Issue on Saturday, 24th November 2022, the economist added that, should the new e-levy be rolled out, it will in turn have an impact on other policies interventions including the Livelihood Economic Empowerment Program (LEAP), Capitation Grant, School Feeding and the Free Senior High School (SHS)

“Even though the government is charging 1 percent on the Gh¢50 and Gh¢100, it is going through another door to increase the Safety Net, the LEAP, through Capitation Grant, School Feeding the Free SHS is still there. So on one hand, it is just trying to cushion the poor”

Dr. Sarkodie further indicated that the government needed to discharge responsibilities of broadening its infrastructure base which requires substantial revenue adding that, the e-levy can be abolished after its intended purposes have been served temporarily.

According to him, “The government is in serious need of revenue. So let us admit it as a country. Yes, there have been some mistakes in the past. So, let’s help the government to pay these taxes now. If after two years they can get per my calculation, if we get about 11 billion from the property rate, which is far more than the 2 billion proceeds from the e-levy then they can abolish the e-levy and reduce the VAT”.

Finance minister, Ken Ofori-Atta on Thursday, 24th November 2022, announced “the headline rate of the e-levy will be reduced to one percent of the transaction value alongside the removal of the daily threshold”.

He said plans have been made to increase the VAT rate by 2.5 percent to support roads and the digitalization agenda.


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