Member of Parliament for South Dayi, Rockson-Nelson Dafeamekpor, has said the introduction of the electronic transaction levy (e-levy) is not the best way for government to generate revenue because it is retrogressive and lacks clarity.

He stated in a Prime Morning interview on Wednesday that “there is no way the claim by government that this would lead to expanding the tax net would be achieved.”

Finance Minister, Ken Ofori-Atta during the presentation of the 2022 budget announced the introduction of a 1.75% levy on all digital transactions.

The levy will be borne by persons who send money through any digital transactions except for inward remittances which will be borne by the recipient.

The government is seeking to raise a total revenue of GH¢6.9 billion from taxes on the E-Levy next year.

But Mr Dafeamekpor said government’s revenue generation target cannot be attained through the levy, adding that the Minority in Parliament will not support its implementation.

“The E-levy they want to introduce, for instance, is retrogressive and therefore we won’t support it. We won’t support them in the sense that you claim you are moving the digitization policy of the country to a higher level; so that for instance, Multimedia can pay its tax obligations to GRA through electronic means.”

“Multimedia wants to transmit that by e-process, a government says for deciding not carry the money in a ‘Ghana must go’ to GRA tax office but you want to do so by e-process, I am levying 1.75% on the amount due government and payable. What that means is that that amounts to double taxation and that amounts to a disincentive for the people to have recourse to using the e-process and promoting the digitalization agenda,” he argued.

The MP further said explanations given by the government about the new taxes captured in the 2022 budget are unjustified and need more clarity.

“The government also intends to review all levies in this country; the minimum level will be 15% and what that means is that our DVLA, vehicle renewal, roadworthy renewal [and] every government service you will require that attracts some payment of a fee is going to go up, and there are over 20,000 of those.

“There is no clarity, they are offering reasons [but] the reasons are not justifiable,” he told Benjamin Akakpo.

Since the announcement of the new levy, it has generated huge criticism against the government by some mobile money users.

Their concerns are that the levy if approved, will worsen the economic hardships in the country. The E-levy is different from other charges customers pay to service providers when performing any transaction.

Meanwhile, government is expected to meet the telecommunication companies on the policy.