In 2022 the government introduced the 1.5% Electronic Transaction Levy (E-Levy), a tax applied on transactions made on electronic or digital platforms. At the time of its introduction, government said it had noticed the growing nature of digital payments, which was affecting its revenue mobilisation.
The government’s unit in charge of revenue collection, the Ghana Revenue Authority, said that between 2017 and 2021, mobile money transactions in Ghana increased from one hundred and fifty-five billion Ghana Cedis to nine hundred and eighty-six billion Ghana cedis.
They observed the development had caused a shift from traditional to digital payment systems and has supported the growth in e-commerce, social media shopping and the use of digital payments.
They, however, realised that these were largely untaxed, and while the mobile money industry grew, several government tax revenue sources such as VAT were experiencing a decline in growth, hence the introduction of the E-levy to rope in more revenue from the sector.
Government said the E-levy will enhance revenue mobilisation for the provision of infrastructure, including roads, as well as provide every Ghanaian the opportunity to contribute to national development through the payment of taxes.
But knowing very well that Ghana as a developing country has a significant number of people in the poor and vulnerable bracket, government decided not to impose e-levy below GH¢100 transaction.
Though many people were not in support of the levy, government’s explanation that it would not affect transactions below the minimum threshold of GH¢100 calmed a lot of nerves.
But interestingly, during the presentation of the 2023 budget, the government announced the removal of the GH¢100 threshold which is supposed to protect the poor and vulnerable in society.
The excuse the government gave for this action was that it will broaden the tax net and enable it to collect more money for infrastructural development.
It is worthy to note that the government also reduced the rate from 1.5% to 1% which we applaud, but The Chronicle is of the view that this reduction will not benefit the poor in any way because they have now being roped into the tax net.
Those within the low income bracket stand to lose because they (poor) are the group of people who usually send and receive such smaller amounts of money. We see the move as inuring to the benefit of the rich rather than the poor and we call on the government to take a second look at this amendment of the e-levy.
We are aware that government has introduced other measures to cushion the poor, such as the expansion of coverage and increment in the allocations to beneficiaries of the Livelihood Empowerment Against Poverty (LEAP), increase in feeding grant to Ghana School Feeding Programme among others, we still insist that government should take a critical look at the removal of the GH¢100 threshold.
We do not think the government considered how the poor and vulnerable will be crippled by this decision, coming at the back of the global excruciating economy. Let us not exacerbate the woes of the poor in the society.
