Despite the agitation and controversies surrounding the Electronic Levy (E-levy) which resulted in a brawl at Parliament last December, Finance Minister Ken Ofori-Atta has maintained that there will be no change in the rate when it is reintroduced in the House.
After a series of back and forth between members of Parliament from both divides, the 1.75 percent tax on all electronic financial transfers ended up in a stalemate – following vehement resistance and rejection by lawmakers from the opposition party. Hence, Parliament decided to pass the budget without the E-levy; giving government an opportunity to rethink the policy.
The ideal expectation was that even if government reintroduced the policy, at least it would come back with a reduced rate. But nothing seems to have changed from the policy presented in the 2022 budget, as Mr. Ofori-Atta in a press conference on Wednesday maintained that the levy will be back at the same rate – saying it is a necessary tool to increase the country’s Gross Domestic Product (GDP) by ensuring adequate revenues to bring down the debt level.
“The E-Levy will not only ensure that we move toward a more sustainable debt level, but also ensure that we have the revenues to sustainably invest in entrepreneurship, youth employment, cybersecurity, digital and road infrastructure. The E-levy also provides a means for all Ghanaians to help support their country and grow this economy as compliant citizens giving to Caesar what belongs to Caesar.
“After extensive consultations, the E-levy will be re-submitted to Parliament this month. We look forward to joining hands with our Honourable Members of Parliament to approve the E-levy on a consensus basis, so we can collectively address the big issue of unemployment. We have in the spirit of burden-sharing and consultation with the telecoms operators gotten 25 percent off their fees. This is in good faith, so let us keep our 1.75 percent to build our country,” he said during the press briefing.
He reiterated that without the E-levy, government will not be able to take undertake certain vital projects which will lead to the creation of jobs and provide better living conditions for citizens.
“As I have indicated already, we intend using the money to create jobs and grow our private sector to employ more of our youth; accelerate the digitalisation agenda to bring more convenience to Ghanaians; enhance the security of our digital platforms; aggressively expand our road infrastructure agenda; reduce our dependence on debt; and reduce crowding out of the private sector to improve access to credit,” he said.
What the E-levy will cover
According to the minister, the E-levy will affect mobile money transfers between accounts on the same electronic money issuer (EMI); mobile money transfers from an account on one EMI to a recipient on another EMI; transfers from bank accounts to mobile money accounts; transfer from mobile money accounts to bank accounts; and bank transfers on a digital platform or application that originates from a bank account belonging to an individual to another individual.
What it will not cover
Mr. Ofori-Atta added that certain transactions will be exempt from the E-levy. This, he said, includes cumulative transfers of GH¢100 per day made by the same person; transfers between accounts owned by the same person; transfers for the payment of taxes, fees and charges on the Ghana.gov platform; and electronic clearing of cheques.
It also includes specified merchant payments (i.e. payments to commercial establishments registered with GRA for Income Tax and VAT purposes); and transfers between principal, master-agent, and agent’s accounts.