Prof Peter Quartey, Director of the Institute of Statistical, Social, and Economic Research (ISSER), revealed a significant 58% divergence from the E-levy revenue target in a candid pre-budget talk on Joy FM on Wednesday cited by Vestadaily.com.
This disclosure follows ISSER’s recent research, which was released on October 31, 2023, deconstructing the effectiveness of the E-levy and sparking critical thoughts on the ideal tax rate for digital transactions.
The ISSER analysis examines the implications of lowering the E-levy rate from 1.5% to 1% in January 2023. Initially, the decrease reduced the use of alternative payment systems. However, the data returned dramatically in February, indicating that the rate change had a potentially short-lived effect.
The research dives into deeper implications, broadening its scope beyond Ghana to provide a worldwide perspective on tax policies. It emphasizes a reoccurring theme: predicted tax revenues did not materialize in numerous of the countries surveyed, stressing the importance of optimizing tax rates.
ISSER’s findings are an important resource for policymakers, suggesting a reevaluation of the E-levy rate to strike a balance between revenue collection and consumer engagement in taxable transactions.
During the conversation, Professor Quartey raised concern about the lack of real-time data, which prevents academics from making well-informed suggestions for effective policy implementation.
This highlights the difficulties in navigating the evolving terrain of digital taxation, as well as the critical requirement for timely and reliable data to make informed policy decisions.