The E-Levy contributes GH93,7,000,000 to the government coffers after only two months.
From the initial GH6.9 billion to GH611 million, the government has revised its income estimate for the contentious E-Levy.
The amount, which was raised between May and June of this year, was roughly 93.59 percent less than the GH1.46 billion aim set in this year’s budget.
As a result, the government reduced the revenue objective for the levy from the initial yearly projection of GH6.96 billion to GH611 million in the Mid-Year Fiscal Policy Review published last Tuesday.
The fiscal policy review’s statistics on the revenue side showed that the performance of nearly all the revenue lines was what contributed to the outcome being less than expected.
According to the statement, “Total income and grants consisting of domestic revenue, tax revenue, and other main revenue streams turned out lower than planned, after delivering GH37.8 billion in the first half of the year from the target of GH43.4 billion.” He said.
The new fiscal policy statement stated that this “mirrors a pattern that has plagued the economy since the beginning of this year.”
The mid-year budget review, which also marginally reduced spending from GH135.6 billion to GH133.84 billion, was reflected in the fiscal policy review, which revealed that the revenue projections for the year had been trimmed from GH100.5 billion to GH96.84 billion.
Nevertheless, despite the failure of the E-Levy’s to produce the anticipated effects, the Governor of the Bank of Ghana (BoG), Dr. Ernest Addison, stated at a news conference last Monday that it was still not time to abolish it.
Ken Ofori-Atta, the minister of finance
Ken Ofori-Atta, the minister of finance, said the government had observed some significant changes in its budget assumptions that had resulted in lower revenues, higher interest payments, and changes in interest and currency rates when he presented the 2022 mid-year budget review on Monday.
He said that the government had promised to steer toward fiscal sustainability and growth in the 2022 budget, and that promise had been reiterated in the Mid-Year Fiscal Policy Review. In spite of the weak external headwinds and underwhelming revenues, he declared, “we are not requesting extra cash at this mid-year review.”
In order to effectively make up for our income gap and aggressively improve our revenues while rationalizing expenses, Mr. Ofori-Atta declared, “We are resolved to leverage the windfall from the upstream petroleum sector.” The administration, according to the finance minister, is committed to staying within the allocated budget for 2022.
The governor claimed that the levy’s exemptions may have contributed to the low amount of income that has been raised thus far; as a result, performance would improve with time. “I don’t believe the E-Levy should be eliminated just yet. Dr. Addison remarked, “Discussions on the level of exemptions given under the tax and its law have occurred that I have been privy to.
When asked if the three-month-old charge should be repealed, he responded, “So, I know there is some work which is now continuing to relook at those exclusions; and perhaps, when that is concluded, the levy will bring in more revenue than it currently does.
By: Obed Mprah Otchere