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WHY THE E-LEVY NEEDS TO BE AMENDED
As a good corporate citizen, I support the E-levy and all other gov’t efforts to raise funds to develop our dear country.
I however sincerely think that the e-levy in it’s current rate, form, and shape is impracticable and is not likely to generate the kind of revenue the government is expecting from it.
Let us take one simple scenario as an example:
A small cement retailer orders 100 bags of cement at 50gh each, total = 5000gh.
This small retailer manages to sell these 100 bags at 52gh each, total = 5,200gh, profit = 200gh.
The small retailer in paying back this 5000gh to the supplier will be paying an e-levy of 75gh out of his meagre 200gh profit.
The assumption with e-levy is that the 5,000gh is the retailer’s money and it wouldn’t hurt if he pays 75gh as e-levy to the gov’t.
The truth however is that the 5000gh is not his money but a loan he is repaying, and 75gh out of his meagre 200gh profit will be too much for him to bear. In some cases, the supplier may refuse to accept momo or ask him to pay the supplier’s e-levy charges as is usually the case with momo.
The net effect is that most people will stop using momo and the govt wont get anywhere near the revenue it is expecting from e-levy.
I think the gov’t should reduce the e-leyy to an acceptable or tolerable rate of about 1% and a maximum cap of about 50gh irrespective of the amount transferred.
In this case, I think the gov’t would get some reasonable revenue from e-levy Instead of almost zero revenue if it is maintained in it’s current form because almost everyone will avoid momo, Including even those who support e-levy.
This in turn will go a long way to harm the govt’s highly laudable and successful digitisation drive.
I support the govts home-grown revenue generation efforts and I think we have to continue to explore other more realistic and sustainable sources of revenue.
At the end of the day, the only way to salvage our economy and avoid the IMF is to do by ourselves, what the IMF will force us to do. i e Increase domestic revenue and cut expenditure,
May the almighty Allah continue to bless our country and guide our leaders in their sincere efforts and numerous social interventions to develop our dear country, Amen
By Alhaji Fuzy Sabonkudi, Respected Businessman & MD of Sabonkudi Estates and Sabonkudi Phones
