• About Us
  • Contact Us
  • Photo Gallery
  • Privacy Policy
  • Terms of Use
  • Citi TV
Tuesday, August 16, 2022
Citinewsroom - Comprehensive News in Ghana
  • Home
  • News
  • Business
  • Sports
  • Showbiz
  • Coronavirus
  • Infographics
  • Livestream
  • Videos
No Result
View All Result
Citinewsroom - Comprehensive News in Ghana
  • Home
  • News
  • Business
  • Sports
  • Showbiz
  • Coronavirus
  • Infographics
  • Livestream
  • Videos
No Result
View All Result
Citinewsroom - Comprehensive News in Ghana
No Result
View All Result

Manso Nkwanta MP writes: There won’t be double taxation during implementation of e-levy

December 6, 2021
File photo

File photo

ShareShareShareShare

The introduction of E-levy by the Government of the New Patriotic Party in the 2022 budget as a novelty of raising tax revenues to support the government agenda for developing the country has two strategic objectives; scaling up employment generation for our teeming youth and the construction of road infrastructure network.

It has been met with varying views and interpretations. It is therefore important to address and educate the public dispassionately on the levy.

E-levy is not anything bad and is not going to create any new burden or cost to the people. It will give to the people more benefits, primarily in employment and road construction and other sectors, than expected. The levy is coming from the world of technology which has been bestowed on social innovation, creativity, and market discovery.

Innovation through research is coming up with new ways of doing things in all our economic engagements. Through this, people become creative using technology in an innovative manner to be more efficient and dynamic, to come up with a variety of products; goods, and services at a reduced cost.

With variety, consumers have a choice to choose from different products efficiently developed at a competitive cost. The new development through technology has also encouraged exchanges in a virtual world, doing away with physical products. Doing away with physical products and objects implies taxes on such products are also avoided, with the government losing tax revenues to finance public expenditure.

Secondly, the advent of technology and innovation comes with externalities (negative/side-effect; like global warming and climate change) which are costly to society to be financed from the public purse. The question is, how do we finance and make up for the loss in tax revenues and the externalities embodied in technology and innovation?

Technology and innovation ensure efficiency in production at a reduced cost that inures to the benefit of consumers as additional income. The E-levy then seeks to take from consumers’ part of these savings and revenue to finance externalities and lost tax revenue.

For example, in the postal services, one may need a postal box, writing pad, envelope, and stamps to write a letter and, take transport to post a letter.

Today, with email, a letter is written and posted through the internet with ease outside one’s comfort zone, saving time and money. The taxes on the postal box, paper, stamps, envelopes, and fuel are avoided. Moreover, monies were sent to relations through post, drivers, agents, and philanthropists at cost directly and indirectly.

With mobile money transfers, the costs of engaging agents to carry, transport, or send money physically to our loved ones and the risk involved are avoided. Savings in time and inconveniences and financial benefits are significant enough for consumers of the product to pay something for the unavoidable externalities. Part of the savings made in using electronics and technology devices is to be paid through E-levy to ensure security in electronic transactions.

Is this new E-levy imposing any additional cost to consumers? No, it is just a contribution of the part of savings and benefits enjoyed by the consumer taken to finance the externalities embedded in the technology and innovative products consumed.

The demand for electronic and technology products, electronic wiring of monetary resources, is expected to be inelastic because the benefits far outweigh any envisaged cost to consumers and consumers may want to be part of the new order of the technology world. The savings in time and avoidance of armed robbery, middlemen absconding with money, tussles, and ordeals one may go through, is worthy enough to stay with technology than to go for traditional ways of doing things. The old ways won’t be attractive to venture any longer.

E-levy is not double taxation as claimed by some people. It is not a tax on capital nor an over-ambitious revenue module to over-tax our people. E-levy as an indirect tax is an event and transactional tax. Each stage of consumption in any economic engagement in the demand and supply chain has its own benefit, on which a levy is paid. Transferring money through mobile money is the event or transaction under consideration from which benefits are enjoyed and cost saved if the transfer has been in a different way.

The purpose for which the transfer is made does not come into the equation and is not the transaction. So if the money transferred is for paying school fees, buying capital equipment, sponsoring a business enterprise, or any other economic activity, it is not the activity that suffers the tax but the means of using the transfer medium that save you all manner of the ordeal, risks, and inconveniences.

The source of any money or income on which you paid a tax earlier is a different event and engagement from the next event or engagement of using the money or income. The new engagement of expending the money or income is another transaction and event of its own purpose, object, or interest.

Expending any income on which tax has been paid earlier to acquire and enjoy a new product (good or service) and paying tax thereon does not constitute double taxation. There are two issues here; first, income earned from an economic activity like employment, business, or investment, on which income tax is paid as a direct tax.

The second activity of acquiring a product (good or service) incurs consumption or expenditure tax, which is indirect. Any person engaging in any economic activity as employment, business, or investment is exploiting the economic resources of a country, society, to earn income directly for his good, and the person has the obligation to contribute to the same society he exploited to cure the ills created from the exploitation. This ensures the maintenance of the security and wellbeing of the people. Persons who consume any product pay indirect tax as a contribution to solving the externalities coming from the production of the product consumed.

E-levy as indirect, consumption and expenditure tax is paid to cater for the externalities coming out of technology development. The tax does not require the filing of tax returns for assessment. Indirect tax is not paid based on the level of your income but on the basis of your desire to consume a product. The more you have the ability to consume, the more you pay and the more you pay the more you support the needy.

Most social interventions come from such taxes, which support the needy most. Through indirect taxes, citizens accept the civic responsibility to contribute towards the building of their society. To give out exemptions is depriving people in the lower-income brackets of their right to own their country in their own small way. To provide any threshold or exemption is to encourage tax avoidance.

People can manipulate the system to escape the payment of taxes and dodge their civic responsibility to own the state and provide for its security. To achieve the purpose of owning the state, an indirect tax rate should be reasonable to rake every person into the tax net rather than exempting them.

Indirect taxes, not being value-added, are imposed generally to prevent the practice of avoidance and evasion, and the tax is simplified by not requiring the filing of returns for assessment. Any threshold or exemption gives way for manipulation to avoid and evade the payment of the tax.

It is worthy to note that E-levy is an indirect, consumption and expenditure tax on electronic technology used to conduct economic transactions that simplify and save consumers from laborious and bitter ordeals.

The tax is on savings made and not an additional cost, double taxation, or tax on capital. It is taxing to cater for externalities like global warming, climate change, and crime.

Do we borrow to pay for these ills?

Source: George Obeng Takyi (MP of Manso Nkwanta Constituency)
Tags: E-LevyGhana NewsMoMo
Previous Post

Prime suspect in Konongo Odumase SHS ‘killing’ case remanded, 4 others discharged

Next Post

Government has introduced digital systems to promote social protection – Cecilia Dapaah

Next Post

Government has introduced digital systems to promote social protection - Cecilia Dapaah

TOP STORIES

Ellembelle MP, others sue Chief of Defence Staff, Adamus Mines over death of Andrew Donkor

August 15, 2022

UG Council recommends removal of Commonwealth Hall Master, Senior Tutor following clash

August 15, 2022

Northern Region CHASS threatens to close schools over lack of funds for food

August 15, 2022
Load More
ADVERTISEMENT
Citinewsroom – Comprehensive News in Ghana

CitiNewsroom.com is Ghana's leading news website that delivers high quality innovative, alternative news that challenges the status quo.

Archives

Download App

Download

Download

  • About Us
  • Contact Us
  • Photo Gallery
  • Privacy Policy
  • Terms of Use
  • Citi TV

© 2021 All Rights Reserved Citi Newsroom.

No Result
View All Result
  • Home
  • News
  • Business
  • Sports
  • Showbiz
  • Coronavirus
  • Infographics
  • Livestream
  • Videos

© 2021 All Rights Reserved Citi Newsroom.

We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. By clicking “Accept All”, you consent to the use of ALL the cookies. However, you may visit "Cookie Settings" to provide a controlled consent.
Cookie SettingsAccept All
Manage consent

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary
Always Enabled
Necessary cookies are absolutely essential for the website to function properly. These cookies ensure basic functionalities and security features of the website, anonymously.
CookieDurationDescription
cookielawinfo-checkbox-analytics11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Analytics".
cookielawinfo-checkbox-functional11 monthsThe cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional".
cookielawinfo-checkbox-necessary11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary".
cookielawinfo-checkbox-others11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other.
cookielawinfo-checkbox-performance11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance".
viewed_cookie_policy11 monthsThe cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data.
Functional
Functional cookies help to perform certain functionalities like sharing the content of the website on social media platforms, collect feedbacks, and other third-party features.
Performance
Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.
Analytics
Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc.
Advertisement
Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. These cookies track visitors across websites and collect information to provide customized ads.
Others
Other uncategorized cookies are those that are being analyzed and have not been classified into a category as yet.
SAVE & ACCEPT