Unemployment likely to increase if e-levy is passed – Dr. Ali-Nakyea

Introduction of E-levy would reduce volume of Momo transaction - Tax expert

Money laundering likely to increase should e-levy is passed – Dr. Ali-Nakyea

Growth in mobile money sector would be derailed by E-Levy - Tax expert

Tax expert, Dr. Abdallah Ali-Nakyea, has warned that the passage of the E-Levy will likely worsen the unemployment challenge of the country.

He explained the growth of the Mobile Money (MoMo) industry in Ghana over the past year has created employment opportunities, however this could be derailed by the passage of the E-Levy.

Speaking at a Rotary Club of Accra meeting, Dr. Ali Nakyea added that the introduction of the levy would lead to a reduction in the number of transactions which could lead to MoMo firms closing up.

“There is a risk of increased youth unemployment. Much of the growth of the Mobile Money industry has employed vulnerable youth, especially women. The Mobile Money industry creates jobs for the Mobile Money agents, service providers and users, including Fintech companies, merchants, retailers, and aggregators. Taxing Mobile Money transactions may discourage growth in transactions, and ultimately this is going to impact the business model.

“With the reduced volumes of transactions, the commission and hence revenue to the agents will reduce. As a result, mobile money agents who generate an income from Mobile Money transactions have been directly impacted to the extent that in Uganda and Congo, some have left the market,” he was quoted by myjoyonline.

Also, he said the introduction of SIM card registration has help reduced acts of money laundering, however if theE-Levy is passed, people would start using cash which would increase the risk of money laundering.

“The requirement to provide identification at SIM-card registration had started to drive down fraud and money laundering through the financial systems. However, by introducing the proposed tax, there is a risk that all these players could revert to using cash (because of the cost), thus increasing fraud incidences and supervision cost,” Dr Ali Nakyea said.

A Deputy Finance Minister, Dr. John Ampontuah Kumah, has said the volume of MoMo transactions would be reduced by 24 percent in the first six months of the implementation of the E-Levy.

He however indicated that the reduction in transaction would not lead to any job losses.