The electronic transactions levy (E-levy), now set at 1.5%, should be lowered to 0.1%, according to the Chief Executive Officer of the Ghana Telecommunications Chamber. Dr. Ken Ashigbey claimed that the introduction of the 1.5% e-levy has been detrimental to the growth of Ghana’s digital sector as well as the government.
He added that while asking for the complete elimination of the tax measure would be insensitive given the government’s desperate need for cash during the current economic crisis, lowering it to 0.1% would revitalize the digital sector and increase government revenue. On Thursday, he stated, “Our argument is the fact that you know, they should scrap it,” on JoyNews’ PM Express Business Edition. But let’s face it; at this point, the government needs funding. The industry is negatively impacted by the deficit position, which is also one of the factors that could explain the cedi’s devaluation. Destabilization of macros would result.
The wisest course of action, he declared, is to lower the level. Some in the sector have been talking about 0.5, but I have indicated that 0.1 percent is the greatest option. In addition to lowering the rate, the government, he continued, need to set a ceiling on it. To encourage more large transactions on mobile money systems, Dr. Ken Ashigbey proposed that transactions of 5,000 cedis or more only be subject to a fixed e-levy rate. He believed that the cap-less system in place at the time made it extremely unfavorable for big-money transactions to take place on digital platforms.
The level should be lowered to 0.1 before being capped. Say GH¢5,000. The levy is set at GH5,000 so that, you know, if someone wants to send GH10,000, that will happen. Remove the distinction between the GH20,000 you pay to the banks and the GH20,000 you give to mobile money, he continued, so that the distinction isn’t the basis for discrimination. He claimed that if physical transactions were limited to GH2,000, for example, people would be compelled to use mobile money systems to conduct significant transactions.
Put a cap on any transaction that can be completed in cash, for example, GH2,000, according to us, which is another novel idea. Use a digital method, such as mobile money or a bank, to do any transaction that costs more than GH2,000. What will happen is that a lot of the clandestine activities—many of which you’ll be able to stop—will enable you to observe a lot of financial flow, which will be beneficial, he added.
