The Director of Economics at the University of Ghana, Professor William Baah-Boateng, has suggested that the government reconsider a 1% tax on electronic transactions (E-levy) instead of the 1.75% proposed in the 2022 budget and fiscal policy.
He explained that the proposed 1.75% tax risked derailing the country’s digitization campaign if implemented in its current form.
Professor Baah-Boateng said on Tuesday at the Ghana Employers’ Association (GEA) Forum on Budget 2022 held in Accra.
Professor Baah-Boateng also urged the government to reconsider the 1.75 percent levy and bring it into line with the elasticity of demand, explaining that “the higher the cost of a product, people will stop. to use it over time, but rather the figure should be such that the user does not feel its impact. “
He said the electronic transaction tax was relatively new and the government should not rush into its implementation.
“Electronic direct debit is an area with great potential, so the government should consider increasing it if possible after six months depending on its performance,” he said.
Professor Baah-Boateng suggested that the government consider generating the rate on the basis of a lump sum, explaining that he might consider setting a threshold for electronic transactions.
Regarding the YouStart initiative, which aimed to help young people develop commercially viable businesses, he said, it would be prudent for the government to select a few entrepreneurs who in turn would employ the large number of young people.
“Over the years, our entrepreneurial strategy has been to provide a meager sum to a number of young people, which gets them nowhere. If we want everyone to be an entrepreneur, we will not give in and the government should reconsider the issue, “he added. he stressed.
Professor Baah-Boateng believed that in a country where all job seekers were forced to be entrepreneurs, this country was doomed to become a failed state.
Indeed, if all job seekers become entrepreneurs, “who will employ who”.
He said the government should aim for a type of transformational entrepreneurship that would allow individuals to employ large numbers of young people.
GEA chief executive Alex Frimpong said the association had made policy recommendations to the government on employer concerns, some of which were presented in the 2022 budget presented to parliament last week.
Concerns, he said, included the macroeconomic environment, the tax exemption bill, the value of the benchmark and the allocation of domestic credit to the private sector.