The General Secretary of the opposition National Democratic Congress (NDC) has lampooned the E-Levy imposed on electronic transactions announced by Finance Minister Ken Ofori-Atta on Wednesday, 17 November 2022 when he presented the 2022 budget to parliament.
Once the 2022 budget is approved, all electronic transactions in Ghana will attract an Electronic Transaction Levy or E-Levy, as part of moves by the government to shore up its revenue mobilisation.
It takes effect from February 2022.
Mr Ofori-Atta explained that the upsurge in the use of e-payment platforms as a result of the COVID-19 pandemic, has been an impetus for the introduction of the levy.
As a result, Ghana recorded a total GHS500 billion from e-transactions in 2020 compared with GHS78 billion in 2016.
He said: “It is becoming clear there exists an enormous potential to increase tax revenues by bringing into the tax bracket, transactions that could be best defined as being undertaken in the informal economy.”
He noted, therefore, that the government is charging an applicable rate of 1.75% on all electronic transactions covering mobile money payments, bank transfers, merchant payments and inward remittances, which shall be borne by the sender except inward remittances, which will be borne by the recipient.
“Mr Speaker, to safeguard efforts being made to enhance financial inclusion and protect the vulnerable, all transactions that add up to GHS100 or less per day, which is approximately GHS3,000 per month, will be exempt from this levy,” he stated.
He said E-Levy proceeds will be used to support entrepreneurship, youth employment, cyber security, and digital and road infrastructure, among others.
“Mr Speaker, this new policy also comes into effect once appropriation is passed from 1st January 2022. The government will work with all industry partners to ensure that their systems and payment platforms are configured to implement the policy,” he said.
Reacting to the move, however, Mr Asiedu Nketia told journalists in parliament right after the budget was read that: “When they mentioned that they are scrapping road tolls, I said that there’s something bigger, something unpleasant that they are bringing on board”, indicating: “MoMo is now the game of the day it penetrates to the rural areas, the unbanked population; they use MoMo, so, if you are taxing that one and you’re rather cancelling road tolls whose incidence falls on vehicle owners, it means that it is not a pro-people budget at all. You don’t maximise revenue at the expense of people who are overtaxed”.