E-Levy: Gov’t made a mistake taxing digital platforms rather than the digital economy
Chief Executive Officer of the Ghana Chamber for Telecommunications, Dr. Ken Ashigbey, has called for a review of the government’s Electronic Transaction Levy (E-levy).
According to him, the government erred when it decided to tax the digital platforms rather than taxing the digital economy.
He explained that the taxing of mobile money platforms such as mobile money wallets as well as fintech platforms has significantly contributed to the stunting growth of Ghana’s digital economy.
He said more and more Ghanaians are now refusing to transact business digitally as against the years prior to the introduction of the e-levy when the digital economy was experiencing a boom.
This he says has driven away investments from Ghana’s fintech space and could possibly lead to a collapse of the industry should revenue continue to drop as fast as they are now especially taking into consideration the current economic woes.
“The error we made with e-levy was that instead of taxing the digital economy, we taxed the digital platforms. Ideally what we should have been doing is helping the digital economy to grow, so now we have the situation where a lot of people like me, I have a farm…and I have a merchant wallet so when people buy they put the money on the wallet, when I have to pay my people, I pay my people with that.
“Now the attitude of a lot of Ghanaians is that even if you want to pay them with mobile money, my workers, even if you want to pay them with mobile money, they don’t want to take it. Because once the money goes onto the wallet, it means they’ll pay the taxes.
“So what you’ve done is that immediately…even merchant payments that were not taxed initially began to dip. And then the revenues for the players in the market as well we saw a dip,”
Dr. Ashigbey noted that while players in the digital economy continue to experience a downward trajectory in their revenue, the government will also fail in accruing the projected taxes it hopes to collect through the e-levy.
“And now that you’re seeing cost of production go up, what is happening is that not only are you missing your 6.9 and then your 690million that you also projected when you did your mid-year review but the corporate income taxes. Part of that 44 million that was paid in 2021 at the end of this year, that might also not materialize.
“Yeah I’m sure we could have looked at it to see how do we do it? Because the digital economy itself, when covid came a lot of businesses went digital, so how do you find a way in which those who are doing business on that particular platform, you can tax them?” he said.
