Dr. Kwabena Duffuor, a former Finance Minister, has labeled the Electronic Transaction Levy (E-Levy) as a problematic tax plan that could stymie Ghana’s progress toward digitalisation.
In his 2022 budget address to parliament, Finance Minister Ken Ofori-Atta stated that the government intends to impose a 1.75 percent levy on all electronic transactions.
The former Bank of Ghana Governor, speaking at a public lecture in Accra on Monday, November 29, 2021, underlined that the new tax is problematic since it will result in double taxation.
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“….In the 2022 Budget, the government decided to broaden the tax base by imposing a 1.75 percent ‘Electronic Transaction Levy,’ or ‘E-Levy,’ on electronic transactions, which includes’mobile money payments, bank transfers, merchant payments, and inward remittances to be borne by the sender, except inward remittances, which would be borne by the recipient.”
“It should be remembered, however, that taxes/levies are levied on incomes/gifts, consumption, and owned properties or assets.” Dr. Kwabena Duffuor explained, “Electronic transfers/payments are none of these.”
“An electronic transfer usually signifies a mechanism of payment or settlement,” the former Finance Minister stated. And, yes, payment methods should not be subject to taxes or levy. This is because taxing modalities of payment might result in instantaneous double taxation because the underlying income, or commodity, would ordinarily have already been taxed.
“As a result, the suggested E-Levy is problematic because it may face major implementation difficulties.” This tax may jeopardize Ghana’s digital economy.”
The E-Levy continues to be opposed by the Parliamentary Minority. The group claims it will continue to oppose the 2022 budget unless the fee is repealed entirely.
