E-levy kickstarts with challenges on levy application by telcos
The controversial electronic transaction levy has finally kickstarted, but it has been hit by some challenges particularly with the application of the levy on mobile money transfers by the telecommunication firms.
Some transactions have been identified in which the percentage charge on the mobile money transactions were inaccurate.
Some consumers have also complained about how the telcos are applying their charges in addition to the e-levy.
Meanwhile industry watchers are worried on how this development will have an impact on the GHS4.5bn revenue target to be mobilized from the levy.
Speaking on the new development, an economist, Dr. Patrick Asuming said, ‘’I will be surprised if they will be able to raise the higher end of that range, that is the GHS 5bn, and I always sense that, I think the government seems to underestimate what the reaction, I think you know, many more people at least in the interim will avoid the tax more than they are projecting I think.
“The Deputy Finance Minister is the one who has previously said that in the first three to six months, in particular mobile transaction will drop by 24% and will gradually recover. I think if you look at the initial reaction, we should be even more modest in how much we expect to raise from the e-levy.”
Additionally, mobile money transaction could face a significant fall since consumers have been said to be withdrawing money from their wallets a day before and on the said day of the e-levy implementation.
This development is said to have a negative impact on the businesses of mobile money agents.
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Meanwhile, electronic transfers between “own accounts” will now attract the 1.5% E-Levy charge.
This is according to the statutory tax collection body, the Ghana Revenue Authority (GRA).
Previously, electronic transactions between accounts owned by the same person was not supposed to attract the 1.5% charge.
The new decision by the GRA per a press release on the guidelines for processing E-Levy refunds by charging entities dated April 29, 2022, is due to the lack of visibility across all networks due to the phased approach to the implementation of the levy.
“Under this phased approach it has been decided that all “on-net” and “off-net” transfers including transfers to “own accounts” shall be subject to the E-Levy,” said the GRA.
The following transactions that will not attract the E-Levy charges per the GRA;
- A cumulative transfer of GHS 100 made by the same person.
- A transfer between accounts owned by the same person [now excluded].
- Transfers for the payment of taxes, fees and charges on the Ghana.gov platform
- Electronic clearing of cheques
- Specified merchant payments (that is, payments to commercial establishments registered with the GRA for income tax and VAT purposes)
- Transfers between principal, master agent, and agent’s accounts.
Transactions that are to attract E-Levy charges include;
- Mobile money transfers done between accounts on the same Electronic Money Issuer.
- Mobile money transfer to a receiver on another Electronic Money Issuer [Interoperability transfer]
- Transfer from a bank account to [another person’s] mobile money account.
- From a mobile money account to [another person’s] bank account.
- Bank transfers on an instant paid digital platform.
The implementation of the E-Levy in a phased approach kick-started Sunday, May 1, 2022.
