All You Need to Know About E-levy, Starts Today

Mobile money vendor

 

 

Sunday, May 1, 2022, is the date when the government’s new 1.5% tax on most electronic financial transfers starts.

The tax has been in the works since November 2021, when the Finance Minister, Ken Ofori-Atta, said that it would be implemented in the 2022 budget statement.

When the National Democratic Congress (NDC) caucus in parliament tried to get it passed twice between December and February 2022, it failed both times. The minority caucus refused to show up for the session, so it was passed in March 2022.

First, the E-levy was set at 1.75 percent. Later, it was reduced to 1.5 percent in the final bill that was approved, among other changes that were made.

The government, for example, said it needed to raise money in Ghana because COVID-19 had a negative effect on the country’s economy. The opposition said that the tax would cause a lot of problems for Ghanaians because they already pay a lot of taxes.

They said the government should cut back on spending and close loopholes as an alternative to the E-levy.

The Ghana Revenue Authority, which is in charge of implementing the new tax, has been having a lot of meetings with everyone involved, including the charging entities, to make sure that the tax is going to be easy to use.

It has also done some media outreach about the levy, but says it will be phased in.

The E-levy will start on May 1, 2022, and by Saturday, April 30, 2022, many commercial banks and all mobile networks had sent a lot of tax messages and emails to their customers to let them know about the change.

E-levy
Mobile money vendor

“Dear Customer, please be aware that an E-levy of 1.5% on electronic money transfers will start on May 1, 2022.” Thank you, AirtelMoney said in a text message sent to me.

Then, “Dear Customer, Thank You.” e-Levy charges start on Sunday, May 5, 2022. To make sure you know, the levy applies to electronic money transfers, such as transfers from a wallet, a bank account, or another bank account to your wallet, a bank account, or another bank. Find out more at www.ubaghana.com Thanks,” UBA also told its customers.

Some people who have talked to Citi News say that the response to the reminders has been a mad rush to get money out of their mobile money accounts. Some think that the introduction of the E-levy will make them do less electronic transactions and more with real money.

As a result of this, the government has lowered its expectations for how much money the E-levy will bring in from the start to about GH4 billion.

The E-levy will be charged on transfers between two people on the same mobile network (eg. AirtelTigo to AirtelTigo), two people on different mobile networks (eg. AirtelTigo to MTN), transfers from Bank accounts to Mobile money accounts, and transfers from Mobile money accounts to banks.

Photo credit, citinews
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