Afenyo-Markin: E-Levy will not affect government’s digitalisation drive

Deputy Majority Leader, Alexander Afenyo-Markin,

The Deputy Majority Leader, Alexander Afenyo-Markin, has stated that government’s decision to tax mobile money will not affect the digitalisation agenda.

Some economists have warned that the introduction of the E-Levy in the 2022 Budget will defeat government’s digitalisation drive and plans to roll out the digital currency – E-cedi.

However, speaking in an exclusive interview on Asaase Radio, Afenyo-Markin said the introduction of the E-Levy is strategic.

“Obviously like I said, COVID affected a lot of businesses, but COVID also introduced a new opportunity in the digitisation space, so a lot of businesses are happening through the internet…” he told our journalist, Wilberforce Asare.

“Nobody should think that government will drive people away from this digitisation space. The 1.75% will not drive people away, because a lot of people are finding space in that digitalisation economy and that is the only space that government can make it to have the people,” the Effutu MP said.

He added: “If you see suddenly that sector is growing big and others are shrinking, would you go to the area that is shrinking, no you only tax where there is expansion, that is basic.”

Mobile money charges to go up 1 February

The government has decided to place a levy on all electronic transactions to widen the tax net and rope in the informal sector, the Finance Minister, Ken Ofori-Atta, has said.

Presenting the 2022 Budget Statement and Economic Policy in Parliament on Wednesday (17 November), 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.

“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.”

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

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

Share of population with a mobile money account in Ghana (2018 to 2021)

Fred Dzakpata

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