Government considering removal of E-Levy on inward remittances

Information available to Asaase News suggests that officials may be considering removing the proposed electronic levy (E-Levy), set out in the Akufo-Addo governments 2022 Budget Statement and Economic Policy, from sums of money sent by individuals resident abroad to individuals in Ghana, otherwise known as inward remittances.

Asaase News sources say that the government is also considering removing the E-Levy from bank transfers.

In its estimates of revenue and expenditure for the 2022 financial year, presented to Parliament on Wednesday 17 November 2021 by the Minister for Finance, Ken Ofori-Atta, the government proposed a levy on all electronic transactions to widen the tax net and rope in the informal sector.

“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 for inward remittances, which will be borne by the recipient” Ofori-Atta said on the floor of Parliament, reading from the Budget.

“Mr Speaker, 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” the Finance Minister added.

Reactions to E-Levy

The announcement of the proposed electronic levy has been met with mixed reactions by Ghanaians of all walks of life.

Some sections of society have endorsed the levy as the only available means through which government can reduce external borrowing, while others say its introduction is likely to have a negative impact on persons the levy will be applicable to as well as on the digitalization drive of government.

Recipients of inward remittances in Ghana will certainly welcome any move by government to exempt their proceeds from the e-levy when it comes into force next February.

Remittances to Ghana

Studies have shown that remittances can reduce the depth and severity of poverty in developing countries such as Ghana, and that they’re associated with increased household spending on health, education and small business.

Despite the impact of COVID-19 on global economies, remittances to Ghana shot up by 5% to US$3.6 billion last year (2020), according to World Bank’s 2021 Migration and Development report.

Race for Numbers

There is a race by both the ruling New Patriotic Party (NPP) and the opposition National Democratic Congress (NDC) to get their Members of Parliament who are out of Accra or out of the jurisdiction back Accra by this weekend in time for voting next week Friday.

The Majority Leader, Osei Kyei Mensah-Bonsu is currently leading a Parliamentary delegation to Madrid, Spain for the 143rd Assembly and related meetings of the Inter-Parliamentary Union.

The delegation also includes the Minority Leader, Haruna Iddrisu, Habib Iddrisu, Majority Deputy Whip, Comfort Cudjoe Ghansah, Minority Deputy Whip, Abla Dzifa Gomashie, NDC Member of Parliament and staff of the Parliamentary service.

Wilberforce Asare

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