1.5% E-Levy on electronic transactions starts today

1.5% E-Levy on electronic transactions starts today

Starting today, Sunday, May 1, 2022, the government of Ghana’s new 1.5% levy that applies to most electronic financial transactions takes effect.

The controversial levy on electronic transactions has been in the offing since November 2021 when the Finance Minister Mr. Ken Ofori-Atta announced its planned implementation in the 2022 budget statement read in the parliament of Ghana.

After two separate unsuccessful attempts to get it passed between December and February 2022, due to fierce resistance from the minority National Democratic Congress (NDC) caucus in parliament, it was passed in March 2022 after the minority caucus boycotted the session.

The E-levy was initially pegged at a rate of 1.75%, but it was later reduced to 1.5% in the final approved bill among other changes suggested.

The government among other reasons cited the need to generate revenue locally due to the scourge of the COVID-19 pandemic on the country’s economy, but the opposition bemoaned that the tax will lead to untold hardship for Ghanaians as many are already burdened with other taxes.

The opposition suggested expenditure cuts by the government and the blocking of loopholes as an alternative to the E-levy.

The Ghana Revenue Authority, which is the implementing authority for the new tax has been engaged in a series of stakeholder meetings including the charging entities to ensure the smooth implementation of the tax.

The authority has also undertaken some media sensitization on the new levy but says it will be implemented in phases.

By Saturday, April 30, 2022, several commercial banks and all mobile networks had sent several tax messages and emails to their customers reminding them of the implementation of the E-levy starting May 1, 2022.

“Dear Customer, kindly be informed that E-levy of 1.5% on electronic money transfer takes effect from 1st May 2022. Thank you,” a broadcast message issued by AirtelTigo to its AirtelTigo Cash users.

“Dear Cherished Customer, Please be informed that E-Levy charges start from Sunday, 01/05/2022. Please note the levy applies to electronic money transfers, including wallet to the bank, bank to the wallet, and bank to bank transactions. Visit www.ubaghana.com for more. Thanks,” UBA also informed its customers.