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E-levy: 1.75% is too high, reduce it – Theo Acheampong

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Policy Risk Analyst, Dr Theo Acheampong, has implored the government to consider a possible reduction of the proposed 1.75% electronic levy.

The e-levy, which was contained in the 2022 budget presented to Parliament on Wednesday, November 17, will be imposed on all electronic transactions covering mobile money payments, bank transfers, merchant payments, and inward remittances which shall be borne by the sender.

Some Ghanaians including the Minority in Parliament have already kicked against it, arguing that the move will intensify the hardships of the average citizen.

Dr Acheampong believes the levy is costly; hence, the Finance Ministry should reduce it to 0.5% and also exclude certain services from the payment of the levy.

He suggested in an interview on JoyNews’ Newsfile on Saturday that transfers from bank accounts to mobile money wallets, as well as payment for essential services and bank-to-bank transfers should be scrapped from the levy.

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“We should reduce the rate down. I think 1.75% is too high…the rate, in my view, has to come down; possibly 0.5%. Left for me alone, I wouldn’t implement it but if government wants to go ahead with it, then perhaps we need to look at which services you exclude, the rate and then the trigger point,” he told Samson Lardi Anyenini.

The economist, however, proposed that the GH₵100 limit “should also be increased. I think [it] could possibly go up to about GH₵175 a day and that, cumulatively, is around GH₵5,000 a month.”

Meanwhile, he stated that the e-levy is not the best tax decision to be taken by the government, saying he is unable to fully comprehend the rationale behind its introduction “especially given the fact that we’re talking about financial inclusion.”

“The evidence base shows that even when we implement these taxes, the so-called informal sector in the country is paying a lot in terms of other indirect prices, talk of petrol, talk of fuel prices, talk of general good and services, VAT, National Health Insurance, Tourism levy.”

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“The people who are making these transfers, to a large extent, are also in the formal sector of the economy so it’s not just a question of roping in the informal sector. In my view, I don’t think that the e-levy is the best of decisions at this point in time,” he stressed.

Finance Minister Ken Ofori-Atta, in a media interview post the budget presentation said the e-levy will provide government with the opportunity to support local entrepreneurs.

But the Minority has decried the levy policy, describing it as an insensitive move that will only deepen the plights of already suffering Ghanaians.

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