Poor people are directly affected by E-levy, Sam George
Sam George describes E-levy as an erosion of digitalization agenda
MP for Ningo-Prampram Sam George believes the introduction of the e-levy is a burden on poor people in Ghana. He said he is highly disappointed and shocked by the new development.
According to him, mobile money has given poor people in Ghana access to financial inclusion thus the imposition of electronic transactions is unfair and erosion of digitalization.
“They are giving tax relief to the rich and taxing heavily the most impoverished persons. The lowest on the economic ladder are taking advantage of mobile money to gain financial inclusion," he said.
Finance Minister Ken Ofori-Atta, during the presentation of the 2022 budget announced a new levy to be charged by the government in 2022 on all electronic transactions to widen the tax net and rope in the informal sector.
“It is becoming clear there exists an enormous potential to increase tax revenues by bringing into the tax bracket, transactions that could be best defined as being undertaken in the ‘informal economy’,” Mr Ofori-Atta observed on Wednesday, November 17 as he presented the 2022 budget statement in Parliament.
“After considerable deliberations, government has decided to place a levy on all electronic transactions to widen the tax net and rope in the informal sector. This shall be known as the ‘Electronic Transaction Levy or E-Levy’.”
The new E-levy will be a 1.75 per cent charge on all electronic transactions covering mobile money payments, bank transfers, merchant payments and inward remittances to be borne by the sender except inward remittances, which will be borne by the recipient.
He further stated that “a portion of the proceeds from the E-Levy will be used to support entrepreneurship, youth employment, cyber security, and digital and road infrastructure among others.”
But Sam George disagrees. He believes Ghana is at a point where the digital economy should be supported instead of taxed.
“This budget singlehandedly erodes 20 years of gains that we have done to build financial inclusion in our country. Mobile money has been in operation since 2009. Mobile money was worth 370billion, by 2020 it was valued at 570 billion. That should tell you how it is growing.
He believes mobile money is the fastest growing sector of the digital economy lamenting that "the value of transactions on e-money is higher than what is going to the traditional banks. Now you have placed a 1.75 levy on it."
The MP however stated that the e-levy is an inhibition of the digitalization agenda.
"This is a government that is talking about digitalization. Bawumia gave a flowery speech on digitalization, things he doesn’t understand and this shows he doesn’t understand because you cannot be talking digitalization and imposing a tax that is inhibiting on digital inclusion."
This new levy is scheduled to start Saturday, January 1, 2022.
