Director of the Africa Digital Economy Forum (ADEF), Derek Laryea, says the introduction of the 1.75% e-levy on mobile money and other electronic transactions will retrogress the country’s efforts in reaching a full digitalization agenda.
He posits that the introduction of this new tax will discourage Ghanaians from going cashless. Rather, many will be inclined to deal in cash transactions to avoid this new levy.
He shared this reasoning during an interview with Samuel Eshun on the Happy Morning Show aired on Happy 98.9FM and e.TV Ghana.
“The effect of taxing the mobile money is that if it will take you five years to reach full digitization, you end up spending more than 5 years and you will spend more time in this process. And there are alternatives. So, if you are taxing me on my MoMo, then I am going to go the cash way, asking my customers to meet me at a physical place to make cash transactions. That is what is going to begin to happen because people will not want to pay from the evidence that is across almost all other countries that tried to impose taxes on MoMo.”
Derek suggested that since the country has begun a digitalization agenda by capturing people on National ID, and by national addresses, there must be more efforts to ensure that people do not move away from cashless transactions.
The government, as part of strategies to widen the country’s tax net, has announced a 1.75% Electronic Transaction Levy on all electronic transactions.
This fee, according to the Finance Minister, Ken Ofori-Atta, is to enhance financial inclusion and protect the vulnerable.
Transactions covering mobile money payments, bank transfers, merchant payments, and inward remittances will have the levy imposed on them and will be borne by the sender.