The Consumer Advocacy Centre, an organisation that seeks to protect the interest of Ghanaian consumers is demanding a reduction of the Electronic Transaction levy from the proposed 1.75% to 0.5%.
In a release issued on November 19, 2021, the organization said it shudder to understand why at a time when Ghanaians are grappling with economic hardship, the government would think of compounding their woes with a new levy.
CAC argues in its release that the government’s target of generating GHC8billion is an ambitious target that will worsen the situation of Ghanaians.
“In narrowing down on the impact of this 1.75% e-Tax on Mobile Money transfers alone, we of CAC estimate, that government is seeking to make over GHC 8 billion from Mobile Money transactions for the year 2022 (based on the record of GHC 569 billion realized as the total volume of MoMo transactions recorded in the year 2020). This estimated GHC 8 billion represents a 10,000% jump in revenue generated from toll booths in a year (GHC 80 million).
"Government must therefore admit that a 10,000% jump in revenue collection in a single year, will certainly rob the citizens off their disposable incomes and deny them the enjoyment of basic commodities that make life worth living. Besides, the consequential inflation due to this valueless introduction into the financial equation of the economy, this will further dry up savings and reduce the value of the cedi, thereby eroding gains in the economic management of the country in the short to medium plannings,” it said in the statement.
The group is therefore proposing to the Finance Minister, Ken Ofori-Atta to reduce the levy from the initial percentage to a new one that they believe will ease the pressure on Ghanaians.
“We call on the Minister of Finance to consider a review of his decision and consequently engage the stakeholders leading to tabling a fresh proposal to parliament, in which he will reduce the rate of the digital tax to 0.5%.
“We are still in a state of surprise at the government's announcement, knowing very well how the application of such e-tax has negatively impacted efforts at financial inclusion in some African countries.
“The Minister of Finance and Economic Planning, and the Minister of Communications and Digitisation are both very much aware of the very elastic response of the Ghanaian consumer to charges on Mobile Money transfers, when charges are above 1 We are all happy with the astronomical growth of mobile money transactions, which is largely due to the non-punitive nature of the charges.
“As a nation witnessing a vigorous campaign mounted by a telecommunication company offering zero charges on all financial transactions done on its platform by subscribers, much is expected of government to beef up leadership gap as exhibited by this corporate body. For whatever that should be the consequences, this business entity has taken the onerous responsibility to absorb all related management charges involved. By implications, the sacrifice is meant to attract more cash-holding consumers from the cash market and transfer same onto the e-cash system,” parts of the statement read.
Read the full statement below
Ken Ofori-Atta