"E-levy: TAGG members agree to cash-based transactions"

" \n E-levy: TAGG members agree to cash-based transactions \n \n\n \n The Traders Advocacy Group Ghana (TAGG) has indicated that its members have agreed to adopt cash-based transactions for their businesses. \n \n\n \n The group's decision comes at the back of the passage of the E-levy bill by government. \n \n\n \n The Group noted that the passage of the Electronic transaction levy (E-levy) does not favour their daily business transactions. \n \n\n \n General Secretary of TAGG, Yaw Poku, in an interview explained that their members agreed to the shift from electronic money transactions to cash-based transactions only to be able cut down cost. \n \n\n \n \u201cPeople are not happy generally, the traders are not happy at all and it\u2019s as if when we talk, they just refuse to listen, so they\u2019ve also taken their decision that they will move back to cash-based transactions,\u201d he revealed. \n \n\n \n Although the Group is not entirely against the policy, the group has since advocated against the module of the e-levy because the members say, it will only plunge the business community back into the era of cash-based transactions and their attendant problems. \n \n\n \n The President, Nana Akufo-Addo, while delivering the SONA last week, appreciated and expressed his excitement on the successful passage of the e-levy bill by Parliament, stating that the e-levy will help mobilize more revenue to revive the economy. \n \n\n \n Meanwhile, President of the Mobile Money Vendors has pointed out that they have observed what can be termed as panic withdrawals from the general public. This has been corroborated by the Traders Advocacy Group Ghana. \n \n\n \n Mr. Poku added that a greater disadvantage will be suffered by local manufacturers. This is because the traders say they may be forced to import goods which would otherwise have been sourced from a local producer, all to avoid charges from the e-levy. \n \n\n \n \u201cThis law (E-levy) seeks to direct that a token is taken from the seed money that I\u2019m using for my business. Some of us have started sourcing locally because the Ministry of Trade per the advice they give is to source from the local industries and work. But in this situation, you\u2019re redirecting our attention to foreign sources again because, with that, I\u2019ll carry my money by air and then go and transact my business,\u201d he said. \n \n\n \n Read: Nigeria offers to be alternative gas supplier to Europe \n \n\n \n Meanwhile, the total value of mobile money transactions over a three months period \u2013 November 2021 to December 2022 \u2013 has declined by GHS 10bn. \n \n\n \n This is per data made available by the Central Bank in its Summary of Economic and Financial Data published in March 2022. \n \n\n \n The platform, which is the largest payment system network in the country, saw its transaction value decline to GHS 76.2 billion in January 2022 from the GHS 86.1billion recorded in November 2021, indicating a drop of GHS 9.9 billion. \n \n\n \n Besides the drop in value on the platform, the total number of transactions also declined as it saw a 24 million drop in January 2022 from November 2021. \n \n\n \n The number of active agents also saw a decline of 7,000 within the same period, while active mobile money accounts also decreased by 600,000 in the review period. \n \n\n \n All these declines experienced since November 2021 when the E-levy was announced by the Finance Minister Ken Ofori-Atta points to the conclusion that users of the mobile money platform are not ready to pay the proposed tax and are resorting to cash options. \n \n\n \n Speaking in an interview, Senior lecturer at the University of Ghana Business School, Dr. Vera Fiador, agrees with the fact that an expected GHS 7 billion revenue targeted from the E-levy will not be achieved given the reluctance to use the mobile money platform by users even before implementation of the tax from May 1, 2022. \n \n\n \n She reiterated concerns that the poor will bear the heaviest burden of the new tax, considering the mobile money platform is their only option when it comes to financial transactions. \n \n\n \n However, President Akufo-Addo thinks otherwise as he says the E-levy is a tax on the mobile money industry and not a tax on the poor. \n \n\n \n The President speaking in an interview on BBC Africa, attributed the passage of the controversial electronic transaction bill to the country\u2019s low tax-to-GDP ratio. \n \n\n \n According to the President, Ghana compared to its West African peers has the lowest tax-to-GDP ratio of about 13% which is below the region\u2019s known tax-to-GDP ratio of 18%. \n \n\n \n The President averred the digital economy is the biggest emerging economy in the country which has not been taxed for several years now. \n \n\n \n To him, taxing the digital economy and particularly mobile money transactions through the E-Levy bill, is bringing the digital economy under the net of taxation for national development. \n \n\n \n \u201cThe digital economy, mobile economy is emerging as the biggest economy in the country and for a long period it has not had any taxation at all, so its important now that it also come into the net (taxation). \n \n\n \n \u201cOur country has the lowest tax to GDP ratios of any country in West Africa, the ECOWAS area tax to GDP average is about 18%, Ghana we are at 13%, if anything at all we are undertaxed. \n \n\n \n \u201cThey [Ghanaians] are not already impoverished (poor), we are talking about taxing an industry where a lot of value is being created and we also want to bring the value to government coffers. \n \n\n \n \u201cGhana is not the only country that has E-Levy, many countries have it, people never like taxes, I don\u2019t know of any group of people especially businesses that when taxes are brought to them they are happy,\u201d he argued. \n \n\n \n President Akufo-Addo on March 31, 2022, signed the E-levy Bill into law. \n \n\n \n As a result, the Bill, which was passed by Parliament on Tuesday, March 29, 2022, has now become a binding law which will be operationalised as a revenue measure across the country. \n "

"E-levy: TAGG members agree to cash-based transactions"

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