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Folks, yesterday the Finance Minister presented the 2022 budget to Parliament and the crafty Ken Ofori Atta decided to pull a fast one on Ghanaians by scrapping the road toll levy which costs 50p and 1cedi, then increasing fees and charges of government institutions by 15% and also introducing a 1.75% electronic transaction levy.

The laziness that went into the decision can never ever be overstated.

They run numbers on Momo transactions for 2021, realized Momo transactions for 2021 hit GHc 900billion, then calculated 1.75% of the 900billion which will give them about GHc 15.5billion annually and boom, e-transaction tax was born.

Folks what they didn’t do was to carefully think about how this will impact on the economy.

Last year alone government gave license to about 20 Fintech start-ups, the minimum capital requirements for these Fintech companies ranges between GHC5Million and GHC20Million depending on what services they provide.

And just a year into their operations, boom Government introduces a killer tax, to take away traffic from online financial transactions.

Just recently, Ghana Revenue Authority has gone digital, introducing an online platform to pay taxes in a convenient manner without having to travel to their offices.

Now we are going to be paying taxes on our taxes when paying our taxes online and this would eventually dampen government revenue efforts.

What about utility bills?

Almost all utility companies in this Country have gone online for payments.

So when you decide to pay your water bill or your electricity bill online, after all the taxes piled on this utility bills, you pay taxes for paying your utility.

The impact on the household is huge but the bigger impact would be on businesses.

This will drag their Cost of Operations over the roof.

Online financial services was introduced to solve a very critical problem, provide easy, affordable and convenient way of transacting business.

Now if a trader is in Kumasi and wants to send money to a supplier to deliver goods to her in Kumasi, if the trader sends GHc 10,000, her charges including the 1.75 killer tax would be GHc 275 but it cost just GHc 120 to travel from Accra to Kumasi and back.

What this means is that now it is going to be more expensive to send money online to your supplier than to travel all the way from Accra to Kumasi and back, the market would respond to this new threat appropriately.

What about jobs?

Mobile money employs more than 150,000 people nationwide.

The market will respond to this and move traffic away from online to cash.

If you run the analysis, at least 35% of this 150,000 could lose their jobs by the end of 2022 if this tax suffices.

The start up Fintech companies are likely to suffer the most, a sharp drop in traffic on online transactions would effectively drag their operations to the ground and they could lose their investments leading to excessive loss of jobs.

This tax would impact negatively on the overall performance of Government revenue.

Now people have an additional reason not to pay their taxes.

If they can’t travel all the way to the GRA office then that’s it.

It is very obvious that not only did Government NOT think through this tax, they also failed to engage the stakeholders in the e-transaction business.

They failed to engage the experts and market analysts as well, after running the nominal numbers they should have ran the numbers on the impact of this levy as well to ascertain the overall net impact on the economy but obviously they were in a hurry to tax us to death, they didn’t have the time to think.

So what do we do?

The Minority in Parliament owes the people of Ghana an even bigger responsibility this time round.

This budget shouldn’t be business as usual, the people of Ghana are relying on them for redemption and this time they cannot disappoint.

Mensah Thompson
Executive Director,ASEPA