A Daring Tussle With E-Levy Cause a Reduction from 1.75% to now 1.0% in Ghana 

The introduction of the Electronic Transfer Levy Act 2022  (Act 1075) also known as E-Levy in the 2022 budget statement of Ghana on page 74 did not sync well with Ghanaians, especially businesses. The E-Levy targeted mobile money payments, bank transfers, merchant payments, and inward remittances.

The E-Levy sought to impose 1.75% taxes on the transfer of money from one mobile money wallet to another. The only exemption as stipulated in section 2 of the E-levy Act was on daily transfers below $8. Everyone was captured in the tax bracket by the introductions of E-Levy including the children (12-17 years old). The goal of the government was to include the shadow economy in the tax bracket. This is the informal sector that thrives on individual and small business initiatives. The informal sector in Ghana employs about 70% of the workforce and contributes 40% to the country’s gross domestic product. 

Conversely, the rollout of E-Levy was met with a huge tussle from citizens, and civil society organizations and YAFO were no different, contributing to policy alternatives and providing evidence-based education to the Ghanaian populace. 

The justification for the introduction of E-Levy which was to create 11 million jobs was popular among some portion of the citizens. Amid unemployment, the promise of jobs in exchange for a new tax policy seems like a win-win situation for some rather than a mirage. 

The education of the populace and adding a fresh voice to the public debate through articles and press releases. YAFO argued in the one article – E-Levy and the Myth of State Sponsored Job Creation Programs – that government programs focused on job creation are unable to create jobs and pointed out spectacular government job creation programs that had failed in recent times including Youth Enterprise Support, National Entrepreneurship and Innovation Plan (NEIP), and Nation Builder Corps (NABCO). Additionally, the new program, YouStart, which the E-Levy intends to fund would become another failed government employment program. 

Also, another publication highlighted similarities between failed government employment programs, NABCO, and YouStart and why Ghanaians should expect the same failed results. This article was titled NABCO & YOUSTART; Same Policy, Different Names and Same Results.

Furthermore, through our presser, Ghanaian parents had the realization that E-Levy affected all money transfers and did not exempt transfers for school fee payments. The press release had a massive impact and impressive media coverage from media houses situated in 9 regions out of the 16 regions of Ghana. We have 10 radio interviews and 6 media publications with an average time of 10 minutes.

Our efforts contributed to the unpopularity of the E-levy, delaying the passage of the bill into an Act, and forcing the government to reduce the initial 1.75% levy to 1.5% before the bill passed in Parliament. The populace understood the E-Levy and undertake avoidance tactics and a reduction in mobile money transactions as people resorted to transfers when necessary. The unpopularity of the E-Levy played a major role as the Government did not meet its Ghs 6 billion revenue target for the E-Levy, having officially reduced its target by ten-fold to Ghs 611 million.

A great win for every Ghanaian and YAFO as well especially when the government announced a reduction of E-Levy to 1% in the 2023 budget statement. This was a great relief for businesses, entrepreneurs, and young professionals using mobile money for everyday life activities. YAFO would continue to endeavor to see E-Levy reduced to its minimum.

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