The Ghana Telecommunications Chamber’s Chief Executive Officer has called for the electronic transactions levy (E-levy) to be reduced from 1.5% to 0.1%.
According to Dr. Ken Ashigbey, the implementation of the 1.5% e-levy has been detrimental to both the government and the development of Ghana’s digital economy.
He explained that while calling for the tax to be repealed entirely would be insensitive given the government’s dire need for funds in the midst of economic turmoil, reducing it to 0.1% would revitalize the digital economy, generating more revenue for the government.
he said, “Our proposition is the fact that, you know, they should scrap it. But we need to be real, government needs money at this particular stage.
“The deficit position is not good for the industry, it affects the industry, it’s one of the things that would account for the depreciation of the cedi. The macros would be destabilised.
As a result, we believe that lowering the level is the best option. Some in the industry have suggested 0.5, but I believe that 0.1% is the best option.”
While the government lowers the rate, he believes it should be capped.
Dr. Ken Ashigbey proposed that transactions of 5,000 cedis or more be subject to a fixed e-levy rate in order to encourage more large transactions on mobile money platforms.
According to him, the current cap-less system makes transacting large sums of money via digital platforms extremely undesirable.
“You know, push the level down to 0.1 and then put a cap on it. Say ¢5,000. At ¢5,000 the levy is fixed so that if anybody wants to send ¢10,000, you know, that will happen,” he said.
“Take out the discrimination between the ¢20,000 that you give to the banks and then you give to mobile money so that the discrimination is not based on that,” he added
Dr. Ashigbey, on the other hand, is urging the government to limit the amount of cash that can be used in a transaction.
When physical transactions are limited to 2,000, for example, people will be forced to conduct large transactions through mobile money platforms, according to him.
“Another innovative thing that we would say is that put a cap on any transaction that can be done by cash, so let’s say ¢2,000. If you want to do any transaction above ¢2,000 use a digital means for mobile money, for the banks and all of that.
“What will happen is that a lot of the things that happen underground… a lot of that you’ll be able to take them off and then you’ll be able to see a lot of movement in terms of cash and that also will help,” he said.
“And then in terms of government payments, make sure that all government payments mandatorily are made simple and let people be able to pay so that tolls that people pay in the market and all that will use these digital means. And if you’re going to do that make sure that it is seamless, it’s not difficult to do,” he added.
