The Ghanaian government has slammed an e-levy of 1.75% on mobile money and other electronic transactions within the country.
This was stated by Finance Minister Ken Ofori-Atta during the reading of the Ghanaian budget for 2022 in Parliament, according to News Ghana.
According to Ghana’s Central Bank records, the breakout of the Covid-19 pandemic accelerated digitalization and its use in Ghana, resulting in a more than 120% increase in the value of digital transactions in the country as of February 2021.
What they are saying
The Minister told Parliament that it is becoming clear that bringing transactions that are best described as informal economy transactions into the tax bracket has enormous potential to increase tax revenues.
He said “After considerable deliberations, Government has decided to place a levy on all electronic transactions to widen the tax net and rope in the informal sector. This shall be known as the Electronic Transaction Levy or e-Levy.”
“Electronic transactions covering mobile money payments, bank transfers, merchant payments and inward remittances will be charged at an applicable rate of 1.75%, which shall be borne by the sender except inward remittances, which will be borne by the recipient.”
The Minister noted that the total value of transactions for 2020 was estimated to be over GHS500 billion compared to GH¢78 billion in 2016; just 5 years ago, while total mobile money subscribers and active mobile money users have grown by an average rate of 18% and 16% respectively between 2016 and 2019.