Bawumia leads government’s digitization and digitalization agenda
Government to impose 1.75% levy on electronic transactions
New E-levy would have negative impact on small businesses, says Manasseh Azure Awuni
Award-winning investigative journalist, Manasseh Azure Awuni has stated that the government’s decision to put a 1.75% levy on all electronic transactions including Mobile Money transfers, negates an agenda by the Vice President, Dr Mahamudu Bawumia.
According to him, the vice president’s previous digitization agenda will be negatively affected with this new initiative.
The Minister of Finance, Ken Ofori Atta, whilst presenting the 2022 Budget Statement, touted government’s efforts in increasing financial inclusion through the expansion of digital financial platforms. Following this, some critics have pointed out that the new levies by government rather negates the effects of the digitization agenda.
Posting on his Facebook page following the budget presentation, Manasseh has stated that the E-levy, specifically the tax on Mobile Money transactions will affect small businesses that depend on the platform.
“The tax on mobile money has negated Dr. Bawumia’s agenda. It will affect small businesses that depend on mobile money,” he wrote.
According to Ken Ofori-Atta, the purpose of the E-levy is to widen the tax net and rope in the informal sector as there exists significant potential to increase tax revenues by bringing into the tax bracket, transactions that could be best defined as being undertaken in the “shadow economy”.
“Electronic transactions covering, mobile money payments, bank transfers, merchant payments, and inward remittances will be charged at an applicable rate of 1.75 percent, which shall be borne by the sender, except inward remittances which will be borne by the recipient.
“Mr. Speaker, to safeguard efforts being made to enhance financial inclusion and protect the vulnerable, all transactions that add up to GH¢100 or less per day (which is approximately GH¢3000 per month) will be exempt from this levy,” the minister stated during his presentation.
He further noted that proceeds realized from the E-levy which comes into effect on January 1, 2022, will in part be used to support entrepreneurship, youth employment, cyber security, digital and road infrastructure, among others.
