General feelings of well-meaning Ghanaians could be described as being disgusted with the National Democratic Congress (NDC) Minority Leader in Parliament, Haruna Iddrisu, when he proudly announced with joy, the jubilation and celebration within his party when it became known that the government could not achieve half of its targeted revenue from the Electronic Transaction Levy (E-Levy). For a party which when in government had introduced higher taxes, and even stood to defend these, now in opposition could oppose a tax as little as 1.50%, clearly shows that it does not have the welfare of Ghanaians at heart.
The NDC had demonised the 1.50% tax on financial transfers and had almost succeeded in taking majority of Ghanaians along with it.
In 2015 while in power, the NDC re-introduced the 17.5% VAT on financial services, it had earlier put up. In the first place VAT cannot be charged on financial services because by its word, VAT means tax on value added to a product. So, how on earth can value be added on financial services so as to attract tax?
When this VAT was in operation, it meant anyone who would purchase bankers’ draft of say GH¢1,000.00to pay their child’s school fees, was mandated to add GH¢175.00 as tax that goes directly to government, besides paying bank charges on the transaction. Can anyone compare this with 1.50% on MoMo transaction of GH¢1,000.00? E-Levy will take GH¢13.50, and MoMo through MTN will take GH¢7.50, that will be GH¢21.00 in total.
The NPP always introduces a tax regime which is very affordable to all. The NDC on the other hand will introduce very high taxes and they will come and defend it. H.E. John Mahama was able to defend why he had to institute high taxes, lamenting how at least 70% of the taxable public do not pay direct taxes.
Tax is one thing people just do not like to pay, no matter how small, however it is the important and essential avenue for government to raise revenue for development.
When the E-Levy was introduced, the NDC went to war of propaganda and typical of its tradition, the party members lied and lied about the sufferings this tax would bring, until it sunk into the minds of gullible Ghanaians. 1.75% then to 1.50%, yet Ghanaians were made to understand that it was just too much. Meanwhile about seven years ago, these same people were paying 17.5% VAT on financial services under an NDC regime and they never complained.
The NDC went on to tell Ghanaians that it would be cheaper to hand deliver any amount they wish to send to someone, than to send that amount through MoMo transaction where the demon E-Levy was waiting to eat up all of the person’s finances.
Now, let’s look at how much it will cost when hand delivering GH¢200.00 from Teshie in Accra to the old folks in Asutsuare in the Shia-Osudoku district of Greater Accra region and doing same for the old folks in Navrongo in the Upper East region.
For Asutsuare: Teshie to Accra by trotro would be GH¢5.50 and Accra to Asutsuare would be GH¢30.00. A round trip will be GH¢71.00 and this is for transportation alone. Sending the GH¢200.00 by MoMo will cost only GH¢3.00; E-Levy would take GH¢1.50 and MoMo on MTN would cost the same.
For Navrongo, it will be GH¢ 5.50, again, from Teshie to the station in Accra and GH¢230.00 from Accra to Navrongo, with round trip costing GH¢471.00. GH¢471.00 to deliver GH¢200.00 when GH¢3.00 would have done the job and done it very well and safely, without any stress. And, the NDC is saying it would be very expensive transferring money by MoMo, since E-Levy will be paid.
Was the NDC going to introduce an E-Levy or E-Levy lookalike tax policy if it had been elected into power? A very interesting section in the NDC People’s Manifesto 2020 seems to be saying “Yes, the NDC would surely introduce E-Levy.”
Section 8:7 of the NDC People’s Manifesto reads:
“8.7). Financial Inclusion and Electronic Payments (FINTECH)
A higher level of financial inclusion will not only benefit the poor, create jobs and reduce inequality but will also grow the formal financial sector. Currently, Ghana’s percentage of financial inclusion is estimated at 58 per cent (as at end-2017) and expected to increase to 75 per cent by 2023.
The next NDC Government will …, c. introduce a uniform transaction fee policy to guide the electronic payments industry.’’
Financial inclusion is a method of offering banking and financial services to individuals. It aims to include everybody in society by giving them basic financial services regardless of their income or savings. It focuses on providing financial solutions to the economically underprivileged.
The question is, what exactly will the NDC implement by introducing a uniform transaction fee policy to guide the electronic payments industry? According to the NDC, this cannot be like E-Levy and yet it never explained what it would have been. It however offered to tell Ghanaians that the Telcos approached the party and begged if it could bring some uniformity in the industry. This is very far from the truth, because firstly we are in a free-market economy which promotes competition. There is no way for the Telcos to suggest uniformity, since if that was made possible, one Telco or the other would suffer losses, since they might have to reduce tariffs to match others. Secondly, why will Telcos go to see a party in opposition to address their issues without going to the ruling party which could give prompt assistance?
The NDC most likely intended to raise MoMo charges to say 17.5% for all Telcos and take 12.5% for government. The Telcos will not complain because earlier their charges were far lower than the 5% now been offered. And trust NDC, it will come out loud to defend this.
Government need revenue from taxes, commissions and levies, to run this country, however, the NDC have succeeded in making sure the revenue generation, for example from E-Levy was not going to happen and today, with unacceptably low revenue coming, the NDC led by Minority Leader, Hon. Haruna Iddrisu, are popping champagne and jubilating that government had failed. This is disgusting, dishonesty and anti-patriotic at the highest level.
If according to Mr Iddrisu and the NDC, 1.50% levy is way too high and would make people very poor, then that party must be ready to charge rates lower than 1.50% whenever it comes back to power. Ghanaians will want to see Bank of Ghana Base Rates at 1.0% and banks should not charge interest above 1.40%; income taxes, revenue taxes, corporate taxes, import taxes and all taxes should not be above 1.40%. By the way, no new taxes, levies and commissions should be introduced. With this the NDC would be regarded as a principled party.
A party whose MPs who had ministerial appointments could illegally draw double salaries, is not a party for the poor. A party whose member when he was president, decreed that Woyome should not be paid anything, because that would amount to stealing from state coffers, but Woyome was made to steal GH¢51 million, cannot be a party for the poor. A tradition which collected fifty cedis notes from the poor and failed to return it, even after forty years, is certainly not for the poor.
The NDC wants to use the poor and vulnerable in society to build an empire. Because how could the members of this party, tell Ghanaians that it was going to be cheaper going by public transport to deliver money to old folks in the village, than sending the money through MoMo? And in all these, Ghanaians became gullible.
Must the poor not contribute to nation building by paying taxes? How poor is the poor, not to be able to afford parting with say GH¢1.50 as their contribution to nation building? Yes, how poor is the poor, when the ordinary poor man can afford to buy and drink at least five tots of akpeteshie a day at a total cost of GH¢5.00 but he is made to understand that he cannot afford to pay GH¢1.50 for mobile money transfer? And what about the poor man who can buy and drink at least two bottles of beer a day at the cost of GH¢18.00? Yes, how poor is the poor?
How poor is the poor, who for every funeral, they can afford to buy special cloth and sew, one for the burial and one for thanksgiving Sunday? For every funeral, there will be different cloths. Yes, how poor is the poor? Meanwhile the rich who could afford sewing and buying wardrobes full of clothing, would also make do with what they already have and never unnecessarily sew a new outfit.
Unless, Ghanaians rise up to their responsibilities to this nation, Ghana will remain as it. The rich are always contributing into the national coffers and the poor must do same, so that they can rightfully be called tax payers. Once again, I express my great disappointment in the NDC for celebrating the loss of revenue to the state.
Hon. Daniel Dugan
