wants the government to do a proper introspection of its current revenue generation strategies.
He insists ongoing discussions to raise funds through the contested Electronic Transaction Levy and suggestions for Ghana to return to the International Monetary Fund (IMF) is a non-starter and must be aborted without any further delay.
He makes a point that government must consider other domestic means to shore up revenues other than plans regarding the E-levy and a fallback to IMF.
Among other things, the Financial analyst revived a conversation for the government to restrategize and raise revenue through a more robust property rate collection system arguing that while E-levy will hurt the business environment, financial support from the IMF on the other will only worsen Ghana’s ailing economy.
“E-levy is not a game changer. Potentially, if we are not careful, and we push it through the way that it’s been presented, it will kill a lot of businesses and all electronic transactions. We need to demystify this IMF business. Ghana is in a tight situation. Let’s not go to the IMF because their conditions may not help, so government must look for ways to increase domestic revenue.”
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“Let’s go for property tax with a vengeance. Let’s set up courts that collect the tax 24/7, give bailiffs more powers to collect it, and set targets for the GRA and that’s how we can raise the revenue. It’s very important, and if I were the Finance Minister, I will go after this tax with a vengeance. So for me, IMF is not the solution because what will they tell us that we do not know already”, Ken Thompson suggested on the Point of View on Citi TV on Wednesday.
The government has rallied Ghanaians to support the E-levy as a home-grown solution to the country’s revenue problems.
There have however been calls for Ghana to head to the IMF and abandon the e-levy, but the government maintains E-levy is a better alternative to a potential return to the Bretton Woods institution.
For Ken Thompson, he wants the government to also channel efforts towards revamping its approaches to refinancing its ballooning debt.
“In the long term, we need to have a sustainable debt strategy. That is what the markets need. The markets will downgrade you because they think there is a possibility for you to default. But if you have a strategy that shows that your debt is sustainable, then that’s fine. That is the most important thing in addition to a strategy that is credible”, he advised.
The e-levy was introduced by the government in the 2022 Budget on basic transactions related to digital payments and electronic platform transactions.
The rate in the budget was 1.75 percent, but it is expected to be reduced to 1.5 percent.
This levy will apply to electronic transactions that are more than GH¢100 on a daily basis.
