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0 Economics Professor Godfred Alufar Bokpin has criticised the controversial Electronic Levy (E-Levy), calling it a policy that was fundamentally flawed from the start.
In an assessment, he argued that even without an economic background, it was evident that the tax was poorly structured and destined to fail.
“Everybody, you don’t need to be an economist to agree that this was poorly designed,” he told Joy News’ PM Express on Wednesday, March 27.
According to him, the E-Levy lacked proper scrutiny and analysis before implementation, leading to unintended economic consequences that burdened citizens and businesses alike.
Professor Bokpin emphasized the chaotic nature of Ghana’s tax policy environment in recent years, describing it as a space where businesses are forced to continually adjust their systems to remain tax compliant.
“If you look at the last two and a half years of the NPP administration, almost every six months, you have to reconfigure your system to be tax compliant.
“The compliance costs incurred by banks, financial institutions, and manufacturing companies just to be compliant are huge.”
The economist pointed out the contradictions in imposing a tax on mobile money transactions while simultaneously advocating for a digital economy and financial inclusion.
“Look, if you want to build a digital economy, you don’t situate a tax along that path. Financial inclusion is key in promoting consumption, promoting growth, and all of that. Yet, we placed a levy right on the channel that facilitates this.”
According to Professor Bokpin, the government’s decision to review the E-Levy is a recognition of its failure.
“Ghana is waking up, and I congratulate the government for taking that decision. It’s not because my Momo transactions are really anything to talk about at the national level, but we are looking at the broader economic impact.”
He did not hold back in describing the levy’s impact on ordinary citizens, painting a picture of double taxation that placed undue strain on individuals.
“You send money to your wife after having paid your taxes, and then you have to pay a lot of tax on it again? I don’t want to say it’s evil, but it was backward.”
Beyond the direct cost to consumers, he questioned whether the levy underwent rigorous evaluation at the Ministry of Finance before being introduced.
“If you see the actual revenue versus the expected revenue and all of that, it tells you that this was not a policy that clearly went through the filtering process.
“Even at the Ministry of Finance, the tax policy unit, I’m not sure this one was really subjected to critical analysis, sensitivity analysis, and all of that.”
With the government now rethinking its approach, Professor Bokpin believes there is a lesson to be learned from the E-Levy debacle.
He predicts a resurgence in mobile money transactions following its review and sees this as an opportunity to rethink taxation in a way that does not stifle economic growth.
“The good news is that we will see Momo uptake again. This is a very direct way of formalizing the informal system and promoting financial inclusion.”
His verdict on the E-Levy was unequivocal: a policy rushed through without due diligence, one that did more harm than good.
“If it’s more emotionally driven, the result is quite clear.”
