The Mobile Money Agents Association of Ghana has called for a further reduction of the electronic transfer levy.
The association wants the levy to be slashed down to 0.5%.
It will be recalled that Finance Minister Ken Ofori-Atta during the 2023 budget presentation revealed that the e-levy will be cut from 1.5% to 1%.
The sector minister also said that the government would remove the daily threshold on all transactions.
According to the minister, the review was part of a “seven-point agenda aimed at restoring macroeconomic stability and accelerating our economic transformation”.
But it appears the relief offered by the government is posing a challenge to the momo agents.
The General Secretary of the Association, Evans Otumfour has said there has been a sharp decline in patronage.
“Government must conduct research to find out why people are not patronizing MoMo. It is obvious that the rate is one of the major hindrances to the government achieving its revenue.
“So government must reduce the rate so that a lot of people will not be impacted. There are over 17 million MoMo users, so if government pegs the rate at 0.1 or 0.5 percent, it will still meet its revenue target. If not, people will look for alternatives like the use of cash,” he spoke to Citi News monitored by theghanareport.com.
E-Levy is a tax applied on transactions made on electronic or digital platforms.
The tax is one of the measures the government introduced to increase the country’s tax-to-GDP ratio from 12 5% in 2021 to 20% by 2024.
The government said it would use the revenue for entrepreneurship, youth employment, digital infrastructure and cyber security, and the provision of road infrastructure.
The government presented it as the panacea for the country’s economic challenges, but a month after its implementation, it failed to yield the projected revenue.
Mr. Ofori-Atta admitted that the levy, introduced in May 2022, has not yielded the resources as expected, adding that stakeholder engagements are still ongoing.
The E Levy is charged at the rate of 1% on the following transactions:
•Mobile Money transfers done between accounts on the same electronic money issuer
•Mobile Money transfers from an account on one electronic money issuer to a recipient on another electronic money issuer
•Transfers from bank accounts to mobile money accounts
•Transfers from mobile money accounts to bank accounts
•Bank transfers on an instant pay digital platform or application originating from a bank account belonging to an individual are subject to a threshold to be determined by the Minister of Finance.
However, not all transfers will be affected by the E Levy.
The levy does not apply to the following types of transfers:
• A cumulative transfer of One Hundred Ghana Cedis a day made by the same person
•A transfer between accounts owned by the same person
•A transfer for payment of taxes, fees, and charges on the Ghana.Gov System or any other Government of Ghana designated payment system
•Specified merchant payments
•Transfers between principal, agent, and master agent accounts and
•Electronic clearing of cheques
The Charging Entities are:
- Electronic Money Issuers
- Payment Service Providers
- Banks
- Specialized Deposit-Taking Institutions
- Other Financial Institutions are prescribed by Regulations made under the Act.