By: Franklin ASARE-DONKOH
A former Deputy Minister of Finance under the Nana Akufo-Addo-led administration, Dr. Alex Ampaabeng, has welcomed the removal of the Electronic Levy (E-Levy) by the John Mahama government, describing it as a distortionary tax that was not fit for purpose.
Speaking in an interview on Accra-based Channel One TV during the Oxfam Tax Dialogue on Tuesday, March 18, 2025, Dr. Ampaabeng explained that the removal of the E-Levy was expected, as both the New Patriotic Party (NPP), which introduced and implemented the tax, and the governing National Democratic Congress (NDC), while in opposition, had promised to scrap it in their manifestos.
According to the former Deputy Finance Minister, the E-Levy functioned merely as a “money transportation tax”, deducting charges on money transfers without adding economic value. While he acknowledged that its removal might create a revenue gap, he emphasised that the focus should now be on finding sustainable alternatives.
“We don’t have anything against the removal of the E-Levy. We are already in the financial year, and it was going to happen. This has been in their manifesto, and we also had it in our manifesto that we were going to remove it.
It is a distortionary tax, so I have no qualms about the removal. It will only create a loophole, and how to fix the loophole should be the conversation. But as a tax expert and someone who understands the distortions such taxes create, I am happy it is gone,” Dr. Ampaabeng explained.
He advocated for a shift towards e-commerce taxation as a more effective way to broaden the tax net, suggesting that the government explore digital market taxation instead of reintroducing similar levies in a different form.
“E-levy is just a money transportation tax—moving money from one person to another, and a tax is deducted from that. No economic value has been created. But the E-levy as it is, is not fit for purpose.”
Expanding on his argument, Dr. Ampaabeng stressed the need for a more strategic approach to digital taxation, stating:
“However, electronic-based taxation or e-commerce taxation is the angle to take. I was hoping that this government or future will look at it as part broadening the tax net, taxing digital market players, which is part of the electronic transfer taxes but not in the form of the current e-levy,” the former Deputy Finance Minister reiterated.
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