The government will maintain the 1.5% Electronic Transfer Levy (E-Levy) despite the underwhelming performance after implementation in July 2022.
This was made known by the Director of Communication of the ruling New Patriotic Party (NPP), Yaw Buaben Asamoa, who insisted that an International Monetary Fund (IMF) support will not lead to a U-turn on the levy.
His responds come in the wake of appeals by a section of Ghanaians calling for the scrapping of the levy after the government announced its decision to engage the IMF for a bailout.
The E-levy is a tax applied on transactions made on electronic or digital platforms. The tax is one of the measures the government plans to use 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 provision of road infrastructure.
It was presented by the government to be the panacea for the country’s economic challenges, but a month after its implementation, it failed to yield the projected revenue.
Reacting to calls for its scrapping, Mr Buaben Asamoa said it will not be cancelled.
“We will not cancel the e- levy because we need to calibrate it well and see how it will perform; its barely a month old, and going to the IMF doesn’t mean that IMF is going to replace our revenue flows; we still have to create revenue,” he told TV3
The E Levy is charged at the rate of 1.50% 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.