Danquah Institute: Introduction of E-Levy a good move

Dr Antoinette Tsiboe-Darko, the executive director of the Danquah Institute(DI)

 Dr Antoinette Tsiboe-Darko, the executive director of the Danquah Institute (DI) has commended governments for the introduction of E-Levy adding 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 transactions, as a measure to “rope the informal sector into the tax net”.

Speaking at a media briefing on Wednesday ( 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, we said 21% even in the COVID-19 pandemic is worth noting .” she said.

From the projections made, government is looking to make GHC6.9 billion from electronic transactions levy in 2022 alone, comparing this figure with what the government is projected to get from all import projected to come into the country, GHC9 billion  we can see that the E-Levy is a powerful way for government to raise revenue

Tsiboe-Darko added, “The levy, therefore, provides a broad based platform for government to increase its needed revenue, in essence the E-Levy is a transactional tax, but it is an extra commission that is being charged and this time it wont be going to enrich the service provider , it ill go into governments coffers to support the drive for entrepreneurship, to pay for our roads and other huge developmental projects.”

The institute, however, called for the classification of prospective tax payers into four groups backed by research and stakeholder engagement.

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

Gh Extractives

Ghextractives.com is an independent multimedia portal that seeks to provide credible information and news content to readers especially players in the extractive sector in Ghana, Africa and beyond. It also provides a unique platform for players in the energy sector to market their products and reach a wider audience

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