Danquah Institute: introduction of E-Levy a good move

Dr Antoinette Tsiboe-Darko, the executive director of the Danquah Institute (DI), has commended the government for introducing the E-Levy, arguing that it will help plug revenue loopholes.

On Wednesday (17 November), the Minister for Finance, Ken Ofori-Atta, announced the E-Levy, a 1.75% tax on mobile money and other electronic financial transactions, as a measure to “rope the informal sector into the tax net”.

Speaking at a media briefing today (24 November), Tsiboe-Darko said the E-Levy is strategic for revenue mobilisation.

“The introduction of a levy on all electronic transactions to widen the tax net and rope in the informal sector is a commendable initiative. The phenomenal growth and resilience that occurred in this sector … we looked at communication alone [and] we said 21%, even in the COVID-19 pandemic, is worth noting,” she said.

Healthy projections

By the projections made, the government expects to make GHC6.9 billion from the electronic transactions levy in 2022 alone. In contrast, it is projected that the government will get GHC9 billion in total from all imports coming into Ghana.

“We can see that the E-Levy is a powerful way for the government to raise revenue,” Tsiboe-Darko said.

The DI director added: “The levy … provides a broad-based platform for the government to increase [the] revenue [it needs]. In essence, the E-Levy is a transactional tax, but it is an extra commission that is being charged and this time it won’t be going to enrich the service provider: it will go into the government’s coffers to support the drive for entrepreneurship, to pay for our roads and other huge development projects.”

However, the institute called for the classification of prospective taxpayers into four groups, backed by research and stakeholder engagement.

Watch the briefing below:

Mobile money charges go up 1 February

Presenting the 2022 Budget Statement in Parliament on Wednesday, the Finance Minister said the government has decided to place a levy on all electronic transactions to widen the tax net and rope in the informal sector.

Ken Ofori-Atta said the new charge will 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%,” Ofori-Atta said, “which shall be borne by the sender except for inward remittances, which will be borne by the recipient.

“This new policy comes into effect from 1 February 2022. The government will work with all industry partners to ensure that their systems and payment platforms are configured to implement the policy.”

As of January 2021, 38.9% of the population in Ghana aged 15 and above had a mobile money account.

The population share of mobile money users increased over the previous three years but decreased slightly in 2021 from 39% in 2020.

Fred Dzakpata

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