Director-General of the National Development Planning Commission (NDPC) Mr. Kodjo Esseim Mensah-Abrampa is rooting for the implementation of the Electronic Transaction Levy (E-Levy) with the argument that its effect on digitalisation will only be temporal.
Finance Minister Ken Ofori-Atta announced plans by the government to tax electronic financial transactions in the country during his presentation of the 2022 budget statement in Parliament on November 17.
The announcement was subsequently opposed by the Minority and some economists arguing that such a levy will cripple government’s agenda to digitise the economy.
Speaking in an interview on Asaase Radio today, Mr. Kodjo Esseim Mensah-Abrampa admitted that the E-Levy will negatively have an impact on digitalisation.
However, he insists that it will only be temporal, and hence the E-Levy must be the way to go.
“So we have look at it in terms of if you come up with any policy will it affect another policy negatively, neutrally or positively, yes, it might affect digitalisation but that is for a very brief moment.
“Yes we understand the payment of E-cost is not inelastic, so immediately you bring it there will be a reaction but the cost of cash payment we have looked at that, so the cost of cash payment is very heavy such that a rationale individual will look at the value of the electronic transfer of cash and then come back,” the NDPC boss shared.
Mr. Kodjo Esseim Mensah-Abrampa added, “So we do not expect that once you bring it people will accept, yes there will be a reaction but we know in the analysis that it will be a brief moment and people will come back to it because the cost of maintaining cash payment is very very high in our situation and is one of the ways that we can bring it.”
One parliament approves the Electronic Transaction Levy, the government will charge a 1.75% tax on all electronic transactions that exceed GHS100.