Today in History: 'Ghana is undertaxed' – Akufo-Addo speaks on BBC

President Nana Addo Dankwa Akufo-Addo in defense of the electronic transaction levy noted that Ghanaians do not pay enough taxes.

According to him, the e-levy is part of measures put in place by the government to increase domestic revenue.

Read the full story originally published on April 5, 2022, by GhanaWeb

President Nana Addo Dankwa Akufo-Addo in an interview with the BBC has said Ghana is undertaxed, compared to other African countries and the world at large.

According to him, the country has put in measures to resolve the current economic hardships it is facing.

He stated that Ghana, like many other countries, was badly affected by the COVID-19 pandemic thus managers of the economy are working to bring the country's economy back to life.

The president made these statements when he spoke in an interview on BBC Africa aired on Monday, April 4.

The president among other things spoke about the E-Levy which was passed by the majority in Parliament on Tuesday, March 29, 2022, the country’s tourism sector, and the Black Stars’ qualification to the 2022 World Cup.

BBC's Peter Ōkwóchè hosted the President for a one-on-one interaction broadcast on BBC’s Focus On Africa, BBC News (World), and BBC World Service.

Meawnhile, here are some extracts of the interview as sighted by GhanaWeb on BBC Africa’s Facebook page.

BBC: Let’s talk about one of the structures that you say you’ve put in place. The E-Levy, a lot of people are calling it a stealth tax on people who are already impoverished. It’s a 1.5% tax on people who do business on their mobile phones.

President Akufo-Addo: The digital economy. The mobile economy.

BBC: Yes, but you’re taxing people on money that has already been taxed.

Akufo-Addo: It’s emerging as the biggest economy in the country and for a long period has not had any taxation at all. So, it’s important now that they also come into the net. Our country has one of the lowest tax to GDP ratios of any country in West Africa and of an equivalent economy.

The ECOWAS area, the general average, today, tax to GDP average is about 18%. Ghana- we are at 13%, so if you’re talking about a country that is already overtaxed, if anything at all, it’s undertaxed.

BBC: Okay, let me just let me take you up on that point, you know, your low tax to GDP, I’m just going to quote to you it’s from John Kwakye, who I’m sure you might know, he’s the Director of Research at the Accra-based Institute of Economic affairs.

He says there are several loopholes in our tax system, that if they are plugged will be able to raise our tax to GDP ratio to something like 20% from the 12% talking about. Are you talking to people like him?

Akufo-Addo: First of all, there’s a recognition.

BBC: He says that there is no need for E-Levy

Akufo-Addo: Well that’s his point of view.

BBC: He’s an expert

Akufo-Addo: He’s an expert. There are experts in government as well, and we think it’s necessary and that’s the reason why we…

BBC: You think it’s necessary to tax people who are already impoverished?

President Akufo-Addo: They are not already impoverished. We are talking about taxing an industry and what transactions where a lot of value is being created. And we want to also bring that value into government coffers.

That is something that is very… and the E-Levy, is not like Ghana is the only country that has something like a mobile tax. Many, many countries, they will not like it…

BBC: Because they are already taxing people who do business online, and you are taxing as well.

President Akufo-Addo: Very little… People never like taxes. I don’t know any group of people, especially businesses, when taxes are brought to them, that like it.

BBC: Mr. President, when you hear all these stories, Ghana was one of the rising stars of the economic recovery of Africa, so to speak, you know, but when you hear about all these issues, what exactly went wrong?

President Akufo-Addo: Nothing has gone wrong. We’re are part of those who have been very badly affected by what has gone on in the last two years.

Until 2020, since I came into office – 2017, 2018, 2019, the beginning of 2020, we were growing our economy, and it’s about 7%, the GDP growth rate.

One of the fastest-growing economies in the world was the Ghanaian economy. Even in the crunch of 2020, when the economies of the world dived, Ghana, we still managed a positive rate of growth because the fundamentals of our economy are strong but it’s been a difficult task for all the economies of the world.

I think it is important that when you’re making the kind of provocative statements that you are making, you situate yourself.

You speak as if you are living in the same time as you and I where the world had gone through very difficult times, and there are several things that we are, which is in the line of being able to pick up our economy again.

I have no doubt that next year if you were to come and speak to me like you are doing today, we will be having a different set of facts for us to look at.

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