Government targets GH¢6.9 billion from E-Levy as revenue for 2022
President Akufo-Addo assents E-Levy into law
Economist, Professor Peter Quartey has expressed worry over the high rate of the Electronic Transfer Levy and its impact on government’s intended target for the 2022 financial year from the tax measure.
The rate for the levy was revised to 1.50 percent before its passage by Parliament with government initially targeting GH¢6.9 billion for a previous rate of 1.75 percent as revenue for 2022.
Reacting to the revised rate for the levy, the ISSER Director in an interview with Citi Business News cautioned that the rate could force consumers to substitute electronic transactions with cash transactions – which could affect the intended revenue target.
“If you look at consumers or users of electronic transaction systems, the E-Levy charge is going to add to their cost of doing business, it’s going to affect people’s incomes or expenditures, and therefore that may have some repercussions. As to whether government will be able to realize the GH¢6.9 billion from the current rate, I’m yet to ascertain. But I am not convinced the rate will help government in bringing in all the targeted revenue,” he is quoted by Citi Business News.
“I still believe that a lower rate would have ensured that almost everybody will continue using the service. A higher rate might make people want to substitute. Some would rather use cash while others use other forms of payment,” he added.
Meanwhile, President Nana Addo Dankwa Akufo-Addo has assented into law the E-Levy paving way for its implementation despite stiff opposition against the Bill by a cross-section of Ghanaians, lawmakers and stakeholders.
Transactions under the E-Levy are expected to take off in May this year, according to the Finance Minister, Ken Ofori-Atta.
The rate of the levy will place a charge on all electronic transactions covering mobile money payments, bank transfers and others.
Professor Peter Quartey, Economist and Director of ISSER-UG