Ghanaians are facing a new form of human insecurity imposed by their own government’s introduction of a new electronic transactions tax of 1.75% that threatens a near total erosion of individual incomes of the citizens.
The main target of the government is E-commerce, or so they claim. However, non-commercial mobile money and electronic bank transactions are massive with shopping for consumables, family remittances, charity donations and gifts topping the list.
This E-Levy is most unkind to those of you who have jobs and earn a fixed income every month. Although you already pay 25% of your basic salary to the government as direct income tax Pay As You Earn (PAYE), you’re now going to also pay as you transact (PAYT) the rest of the month with the rest of the same fixed salary.
This tax will only cease to affect you when you don’t transact electronically or when you have no money to transact with at all.
Considering that we have all become ‘’addicted’’ to electronics, it is impossible that we will not transact electronically. You will definitely use the most convenient electronic means to remit some of your income to your parents, your siblings, your spouses, your cleaners, food suppliers, utility providers etc. All of us will continue to send and receive MoMo but each remittance, each transaction, each gift and donation will cost you 1.75 % tax more.
Yes, but that’s not all. Those who depend on you will also suffer the robbery of the E-Levy. Your dependent relatives will now pay 1.75 % tax whenever they receive and transmit gifts. Why? Because our government needs money after having looted away all the borrowed funds, Covid-19 relief funds, heritage funds etc. with nothing to show for it and no creative ideas to raise the needed funds without directly robbing the people.
Many have questioned what exactly our gov’t is taxing. Is it the income that is already taxed or the mode of electronic transaction with the same income that is being taxed? Value must the created in the chain of transaction and transmission for it to be taxable. At least that is what the basic economists say. Clearly, the Walewale Adam Smith thinks differently.
Tax cannot be discriminatory, unless the government is wrongly assuming that we all transact electronically. Gov’t cannot choose to tax a section of the people just because they are spending their money and paying for their living expenses via electronic transactions. And to make it more bizarre, this same government has promoted a broken record of transforming Ghana through a digital economy. How will this unarmed robbery lead to any positive transformation? At best, this will lead to an economic apocalypse.
Government also claims that it is targeting higher income earners ‘’who transmit more than 100gh at a time’’. In other words, if you can transmit more than 100gh electronically to someone else in whatever transaction, you are effectively a rich person who should be taxed every time you spend a dime on anything or anyone. That is the upside down logic of our insensitive and desperate NPP government.
This is precisely the behavior of a government in its twilight because the masses that rely on MoMo transactions and transmissions are not even income earners. They are mostly dependent on relatives with lower to middle income and charities and people in smaller gigs of handy artisanal works, traders in cottage industries etc.
All these people in the informal sector rely on mobile money services for the convenience it offers them. But does this warrant that the government takes an arm and a leg from citizens who simply rely on digital applications and technologies to live their lives more conveniently? Perhaps, our government is now taxing convenience!
It is even more bizarre that a government that has vigorously promoted and even claim to be champions of a digital economy will turn around to cut their noses to spite their faces. Instead of our government focusing on the entire value chain of the digital economy, they are merely and narrowly focused on ‘’electronic transactions’’, which is a measure of no value!
And therefore our government, led by President Nana Akufo-Addo and Vice President Dr. Mahmud Bawumia is directly engaged in unarmed robbery of the people when they decide to impose an E-Levy that retrogressively and ceaselessly appropriate the labor and income of the ordinary Ghanaian. And this at a time when other governments in other countries are striving to provide a safety net for those most affected economically by the Covid-19 global pandemic.
The Bawumia E-Levy algorithm is like an all-consuming virus that existentially threatens the incomes of Ghanaians, and therefore the security of Ghanaians who have done nothing wrong except to buy into the government-promoted and technology driven digital economy and e-commerce. This all consuming income virus introduced by the NPP government must be resisted with all the vital forces we can muster for the sake of our own survival and the survival of our children.
There is more to say later.
By Sacut Amenga-Etego
November 26 2021