Economist: Reverse policy to tax mobile money
On Wednesday the Finance Minister, Ken Ofori-Atta, announced the E-Levy, a 1.75% tax on mobile money and other electronic transactions
- "We are seeking people to be included in the financial system, we are seeking to go cashless as an economy so that we can get the economy developed, taxing people on MoMo transaction and some bank transfer is not the way to go."
Agyapomaa Gyeke-Dako, a senior lecturer at the University of Ghana Business School, has said the introduction of the E-Levy will defeat the government’s purpose for Ghana’s yet-to-be introduced digital currency, the e-cedi.
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 transactions, as a measure to “rope the informal sector into the tax net”.
Speaking on The Asaase Breakfast Show on Friday (19 November), the economist said the imposition of the policy is a bad move.
“The way to go if we have an agenda to digitalise the economy is not to tax MoMo levies et cetera. This is a no no,” Gyeke-Dako said.
“We are seeking people to be included in the financial system. We are seeking to go cashless as an economy so that we can get the economy developed. Taxing people on MoMo transactions and some bank transfers is not the way to go.
“It is going to defeat Bank of Ghana’s purpose of a cashless society, and even the introduction of the e-money will be at threat,” she said.
Gyeke-Dako said the government should review the policy immediately.
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 aged 15 and above had a mobile money account in Ghana.
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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