E-levy (Ghana) explained

Electronic Transaction Levy (commonly known as Electronic Levy or E-levy) is a tax applied on transactions made on electronic or digital platforms.[1] [2]

Proposal

On 17 November 2021, Ken Ofori-Atta said the Government of Ghana decided to tax all electronic transactions in the informal sector to cover the tax net.[3] [4] He made this known in the 2022 budget statement and economic policy that was read in the parliament of Ghana.[5] 1.75% is the rate of the E-levy which the Government decided to apply on all transactions.[1] [6] [7] [8] Ken Ofori-Atta said it could raise about $1.15billion which will widen the tax net.[9] According to John Kumah, the money generated from the levy would be used for the payments of contractors in Ghana. Also, revenue from the levy would be used to support entrepreneurship, cyber and digital security; road infrastructure and provide jobs to about 11million people in the country.[10] [11] [12] The Government of Ghana said that the introduction of the levy was due to the rise of the use of digital platforms for transactions because of the COVID-19 pandemic.[11]

Transactions

It was proposed the E-levy would cover the following transactions:

Controversy

Some Ghanaians were against the levy claiming it does not serve the interest of common people.[14] [15]

Some economists asked for the proposal to be reversed, claiming that it will jeopardize the government's digitalization efforts and plans to introduce the digital currency.[16]

Haruna Iddrisu said the Minority in Parliament would not support the E-levy claiming it seeks to take away the money of a bigger proportion of Ghanaians in multiple phases.[17]

In December 2021, brawl broke out in the Parliament of Ghana as some MPs of NDC and NPP started punching, ripping shirts, kicks and head-butting each other due to the disagreement of the E-levy bill.[18] [19]

Casiel Ato Forson claimed minority in parliament would reject the E-levy proposal.[20] [21] Kojo Oppong Nkrumah claimed changes were made the E-levy bill after consultations were held,[22] and would be passed when Alban Bagbin is presiding.[23]

Joseph Osei Owusu adjourned sitting of parliament without the passage of the bill into an Act.[24]

Asiedu Nketiah has presented some E-Levy alternatives. The measures, he claims, will exacerbate the deficit that will be produced if the government abandons the contentious electronic transfer levy.[25]

Shatta Wale, a dancehall musician, has weighed in on Ghana's contentious E-vey bill, which has been trending for weeks. According to him, lawmakers that are eager to introduce the electronic transaction tax are unconcerned about Ghanaians' plight.[26]

Latest Developments

MTN and AirtelTigo decided to reduce about 25% on their person-to-person mobile money transfer charges should the levy be passed.[27]

E-levy has been passed by parliament and will take effect from 1st May, 2022. Despite the passage of e-levy, the minority in Ghana's parliament are set to challenge it, at the supreme court. According to them the passage of e-levy is illegal because parliament lacked the required numbers to do so.[28] [29]

Notes and References

  1. Web site: What is the E-Levy?. 2022-01-15. Modern Ghana. en.
  2. Web site: Online. Peace FM. Razak Kojo Opoku Writes: E-Levy Is A Panacea To Sustain Developmental Projects. 2022-01-31. Peacefmonline.com - Ghana news.
  3. Web site: 2021-11-22. Afenyo-Markin: E-Levy is a game-changer for Ghana. 2022-01-15. Asaase Radio. en-US.
  4. Web site: 'We will fight for the ordinary Ghanaian and ensure that e-levy dies' - Ato Forson - MyJoyOnline.com. 2022-01-15. www.myjoyonline.com. en-US.
  5. Web site: Ghana . News . Ghana's E-levy to generate GH₵6.9 billion next year to pay contractors News Ghana . 2022-01-15 . NewsGhana . en-US.
  6. Web site: Parliament to vote on controversial e-levy today. 2022-01-15. BusinessGhana.
  7. Web site: Online. Peace FM. E-Levy: Have A Mindset Of Paying More Taxes – Presby Moderator Tells Ghanaians. 2022-01-15. Peacefmonline.com - Ghana news.
  8. Web site: 2021-12-17. E-levy Bill laid before Parliament. 2022-01-15. GhanaWeb. en.
  9. News: 2021-12-21. Ghana MPs brawl in parliament over mobile money tax. en-GB. BBC News. 2022-01-15.
  10. Web site: 2021-12-07. E-levy proceeds will create jobs for over 11 million people – Ofori-Atta. 2022-01-15. Ghanaian Times. en.
  11. Web site: 2021-12-20. Finance Committee approves E-Levy. 2022-01-15. www.classfmonline.com. en.
  12. Web site: 2021-11-18. Momo tax is very wrong, will widen inequality – Prof Bokpin. 2022-01-15. Prime News Ghana. en-us.
  13. Web site: 2021-11-19. All you need to know about the E-Levy on MoMo, other electronic transactions. 2022-01-15. Prime News Ghana. en-us.
  14. Web site: Boakye. Edna Agnes. 2021-12-31. E-Levy, other taxes will be counterproductive if gov't fails to fight corruption – GPCC. 2022-01-15. Citinewsroom - Comprehensive News in Ghana. en-US.
  15. Web site: Online. Peace FM. E-Levy Won't Solve All Our Problems - Charles Owusu. 2022-01-24. Peacefmonline.com - Ghana news.
  16. Web site: Nartey. Laud. 2022-01-24. E-levy: Concerns on proposed rate must be addressed - Afenyo-Markin. 2022-01-24. 3NEWS.
  17. Web site: Agboklu. George. E-Levy: Adjournment is an opportunity for further consultations – Minority Leader. 2022-01-15. www.gna.org.gh. en.
  18. Web site: Dzidzoamenu. Isaac. MPs exchange blows in Parliament over controversial E-Levy — Starr Fm. 2022-01-15. en-US.
  19. Web site: AfricaNews . 2021-12-21 . Brawl in Ghana's parliament over proposed e-levy . 2022-01-15 . Africanews . en.
  20. Web site: 2021-12-20. Finance C'ttee approves e-levy bill for consideration despite minority's resistance. 2022-01-15. Citinewsroom - Comprehensive News in Ghana. en-US.
  21. Web site: Online. Peace FM. Ato Forson's Court Case: An Attempt To Cow Minority Via Machiavellian Tactics - MP. 2022-01-24. Peacefmonline.com - Ghana news.
  22. Web site: Nartey. Laud. 2021-12-21. E-levy: Remittances, bank transfer, merchant payment taken out - Gov't. 2022-01-15. 3NEWS.
  23. Web site: 2022-01-15. E-levy still on the table, will be passed when Bagbin is presiding – Oppong Nkrumah. 2022-01-15. GhanaWeb. en.
  24. Web site: Parliament of Ghana. 2022-01-15. www.parliament.gh.
  25. Web site: 2022-01-31. E-Levy: Stop the wastage, cut expenditure - Asiedu Nketia proposes alternatives - MyJoyOnline.com. 2022-02-01. www.myjoyonline.com. en-US.
  26. Web site: Online. Peace FM. Shatta Wale Sends Message To NPP Over E-Levy Bill (VIDEO). 2022-02-04. Peacefmonline.com - Ghana news.
  27. Web site: E-Levy: Telcos step in to cushion customers. 2022-01-15. Graphic Online. en-gb.
  28. Web site: Ghanaians to start paying e-levy in may- Ken Ofori Atta. 2022-04-10. Modern Ghana. en-gb.
  29. Web site: Minority to challenge passage of e-levy at Supreme Court. 2022-04-10. Ghana News Online. en-gb.

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