The Ghana National Chamber of Commerce and Industry (GNCCI) has called on the government to reconsider the decision to impose 1.75 per cent levy on mobile money and other electronic transactions in the country.
The chamber maintained that the proposed levy would further worsen the plight of businesses particularly small and medium enterprises (SMEs) which were mainly growth-driven and susceptible to economic and market cycles.
It said to increase revenue, the government should rather focus on finding innovative ways of widening the tax net, ensuring tax compliance, as well as address the rising levels of tax exemptions which did not commensurate business growth.
Widen tax base
The President of the GNCCI, Mr Clement Osei-Amoako, who stated this at the GNCCI Seminar on the 2020 National Budget in Accra last Monday, observed that to enhance tax compliance, the government should widen the tax base through a reduction in the tax rate to a level affordable to the average taxpayer to avoid seeing tax payment as a disincentive.
He said that could be done through the indirect tax system, example sales tax and value added tax (VAT).
“Despite recent declines, interest rates in Ghana remain among the highest in the world. Although the energy situation has improved considerably over the last few years, energy cost to businesses remains too high.
“Struggling businesses pay much higher for energy in order to subsidise households. In Europe and China, households pay higher energy cost to subsidise industry,” he said.
He stated that the chamber’s assessment of the government’s policies and programmes, as well as interaction with the business community led to the submission of seven thematic issues of business concern to the Ministry of Finance for consideration in the 2022 budget.
“These areas included macroeconomy, better business environment, interconnected risk management and resilient industrial value chains, integrating wholesale and retail in Ghana’s economic development programme, enhancing entrepreneurship education and skills development, port operations and benchmark values and optimising Ghana’s trade agreements to enhance industrial growth,” he said.
Mr Osei-Amoako said the seminar was to provide an enhanced platform for policy discussions on government policies and programmes in serving the interest of the private sector.
According to him , the seminar had one objective and it was to allow experts and business operators to appreciate and interrogate government’s policies and programmes contained in the 2022 budget, as well as to explore inherent risk and business opportunities.
“We will have presentations by our panellists on topical issues in the budget followed by an open forum to allow the business community to share their views and seek clarity where necessary.
“Our deliberations will be useful in developing a communique as policy recommendations to the 2022 budget,” he said.
Don’t derail cashless drive
The Partner and Head of Tax at KPMG, Mr Kofi Frimpong-Kore, expressed the hope that the government would review the 1.75 per cent e-levy imposed before the implementation will start in February 2021.
“In our interaction with the Minister of Finance, we had the impression that very soon, the levy will be reviewed following the inputs and reactions made by the stakeholders and the public in general”.
He said government should be cautious not to derail efforts made to promote cashless transactions with the imposition of the new levy.
Source: Graphic Online