An NDC gov't in 2025 will repeal 'distortionary' and 'burdensome' e-levy - Mahama
Former President John Dramani Mahama says an NDC government in 2025 will repeal the Electronic Transfer Act, which he described as a "distortionary" and "burdensome" tax.
Delivering a public lecture in Accra on Monday night [May 2, 2022] on the topic: "Ghana at a crossroads," from the Kempinski Hotel in Accra, former President Mahama said the "government’s desperation to tax Ghanaians to get the nation out of the hell hole it has dumped us will not succeed because government’s own budget proposals show that the e-levy will not make any significant contribution in resolving our problems but would exert an adverse toll on the people of Ghana."
"We in the NDC do not oppose taxation as a principle. We will not be pretentious and couch fanciful slogans to condemn the principle of taxation like the NPP did in the past. We are, however, implacably opposed to distortionary and burdensome taxes like the e-levy that only force Ghanaians to endure more suffering," he added.
"A new National Democratic Congress government, God willing and with the votes of the sovereign people of Ghana – in 2025 – will repeal the E-Levy Act. Even as this government remains fixated with taxing their way out of economic mismanagement, the Akufo-Addo government has been wasteful," he said.
The lecture, publicized as a “state of the nation” address by the former President, described Ghana as being at a “crossroads, and need to move in the right direction", which requires a leadership that is attentive to the needs of the citizenry and acts according to law to ensure that these needs are catered for.
The lecture, was attended by top functionaries of the opposition National Democratic Congress (NDC).
The former President teased out what he said were various challenges be-devilling the country and provided solutions he said if the government takes into consideration will help change the state of the country.
Mr Mahama said the NPP government has "failed to demonstrate prudence in public financial management. The people of Ghana cannot be called upon to pay more taxes only for the accruing money belonging to the people of Ghana, to be dubiously and wastefully shared among family and friends through various fraudulent procurement practices. The creature comforts of the President and his officials cannot be more paramount than the need to protect the public purse and make savings that can be invested in more useful ventures."
E-levy and waste of public funds
"Governments since the 4th Republic have all invested in digital infrastructure in order to modernize our economy.
"In my time as President, we laid the most extensive number of kilometers of fibre optic cable and further provided 4G LTE wireless broadband in order to bring all parts of our country into the new digital revolution.
"Through these investments we have created the opportunity for Ghanaians to enjoy the ease of electronics transactions. Indeed, Ghanaians have taken to the ease of electronic transactions very well.
"Mobile money payments are used for remittances to parents in the villages, they are used in the markets and supermarkets to pay for groceries purchased, they are used by market women and other traders to pay for replenishing their stocks, and they are used at filling stations to pay for fuel and services.
"Internet and electronic banking have made it easier to move money from account to account without the use of cheques or cash transfers.
"This is a positive development for our economy and represents the fastest means of shrinking the informal economy and bringing us all into the formal one. Unfortunately, in the face of this self-inflicted economic catastrophe, this government against all sound advice has decided to introduce the E-Levy, a regressive tax that heaps more suffering on Ghanaians.
"Recently our President was asked in a BBC interview, why he was choosing to tax the incomes of Ghanaians in their electronic wallets that had already been taxed. The President’s answer was that it is the newest and fastest growing sector of our economy that is not being taxed.
"Clearly the President did not understand the question, or he is clueless about the regressive nature of the E-Levy.
"A worker gets paid in his electronic wallet. His PAYE tax has been deducted already. For every transfer or purchase above GHS100 he makes on his e-wallet, he has to pay an additional 1.5% tax.
"It will now be tempting for such a person to draw cash from his e-wallet and make the payment for his groceries, fuel, entertainment, utility bills etc. all with cash.
"The collection of the E-Levy began yesterday and as though a slap in the face, it began on May Day. Already there is a litany of complaints about the implementation.
"There are complaints of transfers of under GHS100 being subject to tax contrary to the law.
"Government’s desperation to tax Ghanaians to get the nation out of the hell hole it has dumped us will not succeed because government’s own budget proposals show that the e-levy will not make any significant contribution in resolving our problems but would exert an adverse toll on the people of Ghana.
"We in the NDC do not oppose taxation as a principle. We will not be pretentious and couch fanciful slogans to condemn the principle of taxation like the NPP did in the past.
"We are, however, implacably opposed to distortionary and burdensome taxes like the e-levy that only force Ghanaians to endure more suffering.
"A new National Democratic Congress Government, God willing and with the votes of the sovereign people of Ghana – in 2025 – will repeal the E-Levy Act. Even as this government remains fixated with taxing their way out of economic mismanagement, the Akufo-Addo government has been wasteful.
"They have failed to demonstrate prudence in public financial management. The people of Ghana cannot be called upon to pay more taxes only for the accruing money belonging to the people of Ghana, to be dubiously and wastefully shared among family and friends through various fraudulent procurement practices.
"The creature comforts of the President and his officials cannot be more paramount than the need to protect the public purse and make savings that can be invested in more useful ventures.
"Ventures such as: education, health, and social housing for Ghanaians. The 2020 Auditor-General’s report makes for grim reading within the context of waste and corruption in the use of public funds. The report revealed that a colossal GH¢12 billion was lost to corruption and other forms of financial malpractices in 2020 alone.
"This is twice the amount that the unpopular e-levy is supposed to accrue this year. It has also recently come to light that our State-Owned Enterprises made total losses of about GH¢5.3 billion in 2020. Another report has revealed that up to GHS 9 billion of losses was incurred by Energy Sector SOEs between 2018 and 2021. How can the taxpayer ever be called upon to pay more when his money is going down the drain in this manner?
Gov't that listens
Mr Mahama argued that Ghana needs a leadership that listens and therefore called on the government to do a cabinet reshuffle among other proposals he thinks the government ought to do to help build a genuine consensus on nation building.
The lecture, publicized as a “state of the nation” address by the former President, described Ghana as being at a “crossroads, and need to move in the right direction", which requires a leadership that is attentive to the needs of the citizenry and acts according to law to ensure that these needs are catered for.
The lecture, was attended by top functionaries of the opposition National Democratic Congress (NDC).
Below is a video of the address
A nation at the crossroads
"Countrymen and women, Ghana our dear nation is at a Crossroads, and we must tarry a while and reflect deeply on the road that we must take. The wrong choice leads us down an easy path of chaos and destruction. The right choice would lead us up a path of prosperity and dignity, but with hard work and sacrifice.
"My countrymen and women, I can assure you that as our forebears did in the past, if we come together – united as one – there is no task that will be insurmountable.
"The future is bright if we rebuff those who seek to divide us for their personal gain, and if we open the opportunities of our country to all our citizens irrespective of ethnicity, political affiliation, age or gender.
"Thirty years have passed since President Jerry John Rawlings of blessed memory, appended his signature to the newly drafted Constitution of 1992, which made an irrevocable commitment to a return to democratic rule and constitutional governance.
A broken social contract
Since the first elections were held under the fourth republic some thirty years ago, there have been three changes in governments.
Each of these changes has been heralded by expectations of better governance leading to tangible improvements in the socio-economic conditions of our people.
The NPP government came into office in January 2017 on the back of mouthwatering promises of almost instant transformation of our country amid countless slogans.
President Akufo-Addo did promise to change Ghana in eighteen (18) months if voted for. Yes, he promised to turnaround the fortunes of Ghana and create opportunities for all and take care of everyone in 18 months. A significant number of our citizens associated the promises with good and noble intentions. In return, and despite our best efforts, the Ghanaian people offered the NPP a clear mandate to steer the affairs of our dear country.
An assessment of our current conditions shows that what is happening now bears very little or no resemblance to what was promised.
There is a sharp disparity between promise and practice. Today, most Ghanaians feel they were hoodwinked, and this is manifesting in their personal livelihood and their daily struggles. Perhaps, the most defining challenge of our time is making the economy work for everybody.
Over the last several months, our political space and societal reaction has been dominated by discussions on the challenges with introducing more taxation.
These conversations have been against the backdrop of unparalleled cronyism and nepotism, breaches of the basic tenets of conflict of interest, transparency and accountable governance, and misplaced spending priorities by the President and his inner circle. On top of these is the subjugation of independent constitutional bodies to the whims and caprices of the President and his cronies.
The painful epiphany is that in Ghana today, the frustrations of the Ghanaian people are at an all-time high. We are well and truly at a crossroads!
A crossroads that is acutely complicated by the doubt and the fear experienced by the next generations, that they face a future that carries no expectation of success in their lives. For most Ghanaians, the feeling of despondency and hopelessness is real and personal.
It is exacerbated by a dangerous trend of growing inequality and lack of upward social and economic mobility in addition to a calculated effort at constraining social justice. Interestingly, the condescending responses from government officials to public complaints have often accentuated the frustration and anger of the people.
A government bereft of ideas has resorted to incarceration of critical voices, name calling of the citizens, and unfair categorisation of the labour force and huge numbers of unemployed youth as lazy and underserving.
Worse of all, the government has been using chaotic shouts and insincere technical analysis laden with dubious comparisons and outright untruths to manage the narratives. Another worrying trend is the bastardisation of independent constitutional bodies, obfuscating their objectivity and introducing deliberate constraints on their ability to act independently and in accordance with their mandate.
This deliberate strategy has resulted in heavily politically coloured and conflicted persons assuming positions within such institutions, alongside the swift dismissal of persons who have dared to act in an independent and fair manner. The Domelevo’s of our time. The cumulative effect of these travesties on this crossroads that Ghana has reached, is unparalleled shambolism and lack of substantive accountability in the management of national affairs.
Below is a copy of the full address
Writer's email: enoch.frimpong@graphic.com.gh