On November 17th, 2021, Finance Minister, Ken Ofori-Atta, announced the introduction of 1.75% tax on all electronic transactions during the 2022 budget presentation before parliament. The Ghanian parliament proposed a 1.75% tax on electronic transactions known as an e-levy which caused great conflict amongst the two parties. The digital space for currency was built to benefit the citizens who have little access to capital and economic opportunities, hence, if this space is taxed it further negatively impacts lower income citizens. This act would set back the country and its people, yet, the government states it will raise funding to develop the infrastructure in an innovative way. Questions arise as to why the abundant natural resources are not appropriately used to raise funds by processing them in the country as opposed to allowing foreign intervention and taking unnecessary loans from damaging institutions like the International Monetary Fund (IMF), World Trade Organization (WTO), World Bank, etc.
The conflict in parliament sparked when the speaker had delegated his deputy to vote on the house proceeding unjustly. The opposition members were frustrated due to the fact it is not allowed for the deputy speaker to vote on matters, especially one as sensitive as the e-levy tax. The bill was submitted as an urgent proposal in the parliament, the request was seen as an insult to the opposition legislators and most citizens that were familiar with the tax bill. In this moment, I noticed that the people of Ghana pay closer attention to politics than specific populations in the United States, where bills are being passed everyday and it goes unnoticed until it has noticeable negative repercussions on the general public. We are in a moment in history where governments are working for themselves as opposed to their solemn duty to serve the people. This means there is opportunity for the people to rise up and replace the government and govern themselves on their accord, what will people do worldwide to halt mismanaging governments?
The proposed e-levy will affect people of lower socioeconomic background who extensively rely on mobile transactions (MoMo) for the daily lives. A common way of making transactions is with mobile money which emerged as a digital payment method, increasing the number of subscribers by 15% in 2020 with an estimated value of transactions at GHS 589 billion (Researchers at Stanbic Bank).
As great as mobile money seems, I noticed a proceeding issue that surfaced, which is the tracking of citizens through digital devices by requiring registration of ID. Tracking and privacy invasion is something that is catching up to even the developing countries which poses an even greater risk to the security of citizens worldwide. According to Ghana's National Identification Authority, about 15.5 million out of the population of 30 million have registered with formal identification (ID). The policy of registering formal ID excludes a large proportion of individuals from using mobile money and furthers the gap to reach financial inclusivity. Financial inclusion indicates a state in which everyone can develop and access a range of quality financial serves at affordable prices in an efficient manner. Research shows that people without formal ID tend to have lower incomes or live in rural village areas, where mobile money is their only access to financial services. This instated policy financially excludes those who rely on mobile money agents for remittances without formal ID.
However, financial inclusion must consist of a combination of market depth of size and liquidity, efficiency for sustainable low-cost financial services and access for the ability of individuals to access financial services. Mobile money increases the speed and enhances security by reducing the transport of cash, increase transparency through digital accounting of receipts, and can provide entry points into the formal financial system. This promotes self-insurance within an economy that is deprived of productivity and opportunities. Mobile money is becoming increasingly popular across the region but the policy entails having to carry identification every time. The ID policy makes it strenuous on citizens because it is difficult to obtain and replace IDs due to the scandalous bureaucratic processes. This policy along with the new proposed e-levy will derail the financial inclusion gains and Ghana's cashless society agenda.
According to Ghanaian Finance Minister Ken Ofori-Atta, the levy would widen the tax revenue to $1.15 billion in 2022. A vote on whether to proceed with the urgency procedure was debated again on January 18. The debates are ongoing in the Parliament of Ghana as the executive's relentlessly ensured the electronic transaction levy passed before the house.The finance minister states the tax was meant to enhance financial inclusion and protect the vulnerable in the country, yet, this proposed bill does the exact opposite hence the public backlash from Ghanians and members of Parliament form the Minority Caucus. The Effutu lawmaker states they will be using this weekend to conclude:
“These are important steps that government wants to take to deal with these two major issues [road sector and unemployment] in the country. It requires engagement with stakeholders and I believe that is what we are doing. Surely we are getting somewhere and I have no doubt on my mind that next week we would have gotten to a level where getting the bill passed would not have too many problems. Already we have passed the budget, we have passed the appropriation and all of these were passed by consensus. What is left is the revenue to help deal with the expenditure on these critical areas."
Since the pandemic, the economy has worsened while the government introduces new taxes and high fuel process that have skyrocketed the cost of basic goods and services. Financial development needs to be interpreted more broadly than increasing the size of the formal financial sector by incorporating quality, access to services, and encouraging production oriented mindsets.
The Afrakan people on the continent have entire nations to themselves to operate and be in control while the Afrakan imports into America are considered third-class citizens in the lands of their enemies and the rest of Afrakans around the world are exploited in numerous ways. We must come together as Afrakan people globally to maximize the opportunities of creating the societies we deserve. It is our sovereign duty to bestow heaven on Earth, so we must not wait for any individual, entity, or government to do it for us.
We are the ones we have been waiting on.
None is our enemy.
Nor is anyone stranger to us.
We are in cordial accord with one and all.
The One Allah pervades all seeing whom, I am in bloom of joy.
~Asè