Chief Executive Officer of the Ghana Telecommunications Chamber, Dr Ken Ashigbey, has called for a review of the Electronic Transaction Levy (e-levy), which is currently at a rate of 1.5 per cent.

Dr Ashigbey believes that lowering the tax on all electronic transfers from 1.5 percent to 0.1 percent would ensure an absolute fulfilment of its objective.

This, he said, would encourage greater use of electronic transfer channels by both businesses and people, generating more income for the government.

He pointed out that the levy, in its current form, has shown to be ineffective at increasing government revenue.

“The deficit position is not good for the industry, it affects the industry, and it’s one of the things that would account for the depreciation of the cedi. The macros would be destabilised. So we think that the best thing to do is to reduce the level. Some in the industry have talked about 0.5, but I have said that the best thing to do is to do 0.1%,” Dr Ashigbey stated.

The Mobile Money Agents Association of Ghana has backed calls for a review of the e-levy.

The 2022 mid-year budget review reveals that the government has only raked in GH₵93.7 million, from the GH₵1.46 billion target for the first half of this year since its implementation in May 2022.

The tax is applied to electronic transactions exceeding GH¢100 daily. However, during the early stages of implementation, there were complaints that some transactions below the threshold were being taxed.

This, among many other reasons, has made the e-levy unpopular. For some Ghanaians, the levy should be scrapped off.

In his submission, Dr Ashigbey failed to side with the section of the Ghanaian populace calling for the total scrapping of the e-levy.

He explained that this is not a prudent step to take since “government needs money at this particular stage.”

Aside from calling for a reduced rate, the CEO of the Chamber suggested that the government place a fixed e-levy rate on transactions that are 5,000 cedis and above to take away the undesirable cap-less system and encourage more large transactions.

“You know, push the level down to 0.1 and then put a cap on it. Say ¢5,000. At GH¢5,000 the levy is fixed so that if anybody wants to send ¢10,000, you know, that will happen. Take out the discrimination between the GH¢20,000 that you give to the banks, and then you give to mobile money so that the discrimination is not based on that,” he said.

The government has noted its desire to run a cashless economy, however, the e-levy in its current state seeks to derail its success so far.

Although noting that a lower rate for the levy will help the government stay on track, Dr Ashigbey has also advised the government to place a cap on the amount of physical cash that can be used for transactions.

“Another innovative thing that we would say is that put a cap on any transaction that can be done by cash, so let’s say GH¢2,000. If you want to do any transaction above GH¢2,000 use a digital means for mobile money, for the banks, and all of that.”

“What will happen is that a lot of the things that happen underground… a lot of that you’ll be able to take them off and then you’ll be able to see a lot of movement in terms of cash, and that also will help,” he explained.

Nonetheless, he called on the government to take the necessary steps to ensure a digital economy is easily accessible and convenient.

Source: The Independent Ghana|