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E-levy (Ghana)

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Electronic Transaction Levy (commonly known as Electronic Levy or E-levy) is a tax applied on transactions made on electronic or digital platforms.[1][2]

Proposal

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On 17 November 2021, Ken Ofori-Atta said the Government of Ghana decided to tax all electronic transactions in the informal sector to cover the tax net.[3][4] He made this known in the 2022 budget statement and economic policy that was read in the parliament of Ghana.[5] 1.75% is the rate of the E-levy which the Government decided to apply on all transactions.[1][6][7][8] Ken Ofori-Atta said it could raise about $1.15billion which will widen the tax net.[9] According to John Kumah, the money generated from the levy would be used for the payments of contractors in Ghana.[5] Also, revenue from the levy would be used to support entrepreneurship, cyber and digital security; road infrastructure and provide jobs to about 11million people in the country.[10][11][12] The Government of Ghana said that the introduction of the levy was due to the rise of the use of digital platforms for transactions because of the COVID-19 pandemic.[11]

Transactions

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It was proposed the E-levy would cover the following transactions:

  • All inward remittances (which would be paid by the recipient)
  • All person-to-person (P2P) mobile transactions (which includes sending of funds to another account, payment for goods and services, payment of utilities
  • All POS/Merchant payments.[1][13]

Controversy

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Some Ghanaians were against the levy claiming it does not serve the interest of common people.[14][15]

Some economists asked for the proposal to be reversed, claiming that it will jeopardize the government's digitalization efforts and plans to introduce the digital currency.[3][16]

Haruna Iddrisu said the Minority in Parliament would not support the E-levy claiming it seeks to take away the money of a bigger proportion of Ghanaians in multiple phases.[17][5]

In December 2021, brawl broke out in the Parliament of Ghana as some MPs of NDC and NPP started punching, ripping shirts, kicks and head-butting each other due to the disagreement of the E-levy bill.[18][19]

Casiel Ato Forson claimed minority in parliament would reject the E-levy proposal.[20][21]Kojo Oppong Nkrumah claimed changes were made the E-levy bill after consultations were held,[22] and would be passed when Alban Bagbin is presiding.[23]

Joseph Osei Owusu adjourned sitting of parliament without the passage of the bill into an Act.[24]

Asiedu Nketiah has presented some E-Levy alternatives. The measures, he claims, will exacerbate the deficit that will be produced if the government abandons the contentious electronic transfer levy.[25]

Shatta Wale, a dancehall musician, has weighed in on Ghana's contentious E-vey bill, which has been trending for weeks. According to him, lawmakers that are eager to introduce the electronic transaction tax are unconcerned about Ghanaians' plight.[26]

Latest Developments

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MTN and AirtelTigo decided to reduce about 25% on their person-to-person mobile money transfer charges should the levy be passed.[27]

E-levy has been passed by parliament and will take effect from 1st May, 2022. Despite the passage of e-levy, the minority in Ghana's parliament are set to challenge it, at the supreme court. According to them the passage of e-levy is illegal because parliament lacked the required numbers to do so.[28][29]

References

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  1. ^ a b c "What is the E-Levy?". Modern Ghana. Retrieved 2022-01-15.
  2. ^ Online, Peace FM. "Razak Kojo Opoku Writes: E-Levy Is A Panacea To Sustain Developmental Projects". Peacefmonline.com - Ghana news. Retrieved 2022-01-31.
  3. ^ a b "Afenyo-Markin: E-Levy is a game-changer for Ghana". Asaase Radio. 2021-11-22. Retrieved 2022-01-15.
  4. ^ "'We will fight for the ordinary Ghanaian and ensure that e-levy dies' - Ato Forson - MyJoyOnline.com". www.myjoyonline.com. Retrieved 2022-01-15.
  5. ^ a b c Ghana, News. "Ghana's E-levy to generate GH₵6.9 billion next year to pay contractors | News Ghana". NewsGhana. Retrieved 2022-01-15. {{cite web}}: |first= has generic name (help)
  6. ^ "Parliament to vote on controversial e-levy today". BusinessGhana. Retrieved 2022-01-15.
  7. ^ Online, Peace FM. "E-Levy: Have A Mindset Of Paying More Taxes – Presby Moderator Tells Ghanaians". Peacefmonline.com - Ghana news. Retrieved 2022-01-15.
  8. ^ "E-levy Bill laid before Parliament". GhanaWeb. 2021-12-17. Retrieved 2022-01-15.
  9. ^ "Ghana MPs brawl in parliament over mobile money tax". BBC News. 2021-12-21. Retrieved 2022-01-15.
  10. ^ "E-levy proceeds will create jobs for over 11 million people – Ofori-Atta". Ghanaian Times. 2021-12-07. Retrieved 2022-01-15.
  11. ^ a b "Finance Committee approves E-Levy". www.classfmonline.com. 2021-12-20. Retrieved 2022-01-15.
  12. ^ "Momo tax is very wrong, will widen inequality – Prof Bokpin". Prime News Ghana. 2021-11-18. Retrieved 2022-01-15.
  13. ^ "All you need to know about the E-Levy on MoMo, other electronic transactions". Prime News Ghana. 2021-11-19. Retrieved 2022-01-15.
  14. ^ Boakye, Edna Agnes (2021-12-31). "E-Levy, other taxes will be counterproductive if gov't fails to fight corruption – GPCC". Citinewsroom - Comprehensive News in Ghana. Retrieved 2022-01-15.
  15. ^ Online, Peace FM. "E-Levy Won't Solve All Our Problems - Charles Owusu". Peacefmonline.com - Ghana news. Retrieved 2022-01-24.
  16. ^ Nartey, Laud (2022-01-24). "E-levy: Concerns on proposed rate must be addressed - Afenyo-Markin". 3NEWS. Retrieved 2022-01-24.
  17. ^ Agboklu, George. "E-Levy: Adjournment is an opportunity for further consultations – Minority Leader". www.gna.org.gh. Retrieved 2022-01-15.
  18. ^ Dzidzoamenu, Isaac. "MPs exchange blows in Parliament over controversial E-Levy — Starr Fm". Retrieved 2022-01-15.
  19. ^ AfricaNews (2021-12-21). "Brawl in Ghana's parliament over proposed e-levy". Africanews. Retrieved 2022-01-15.
  20. ^ "Finance C'ttee approves e-levy bill for consideration despite minority's resistance". Citinewsroom - Comprehensive News in Ghana. 2021-12-20. Retrieved 2022-01-15.
  21. ^ Online, Peace FM. "Ato Forson's Court Case: An Attempt To Cow Minority Via Machiavellian Tactics - MP". Peacefmonline.com - Ghana news. Retrieved 2022-01-24.
  22. ^ Nartey, Laud (2021-12-21). "E-levy: Remittances, bank transfer, merchant payment taken out - Gov't". 3NEWS. Retrieved 2022-01-15.
  23. ^ "E-levy still on the table, will be passed when Bagbin is presiding – Oppong Nkrumah". GhanaWeb. 2022-01-15. Retrieved 2022-01-15.
  24. ^ "Parliament of Ghana". www.parliament.gh. Retrieved 2022-01-15.
  25. ^ "E-Levy: Stop the wastage, cut expenditure - Asiedu Nketia proposes alternatives - MyJoyOnline.com". www.myjoyonline.com. 2022-01-31. Retrieved 2022-02-01.
  26. ^ Online, Peace FM. "Shatta Wale Sends Message To NPP Over E-Levy Bill (VIDEO)". Peacefmonline.com - Ghana news. Retrieved 2022-02-04.
  27. ^ "E-Levy: Telcos step in to cushion customers". Graphic Online. Retrieved 2022-01-15.
  28. ^ "Ghanaians to start paying e-levy in may- Ken Ofori Atta". Modern Ghana. Retrieved 2022-04-10.
  29. ^ "Minority to challenge passage of e-levy at Supreme Court". Ghana News Online. Retrieved 2022-04-10.
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