E-levy will widen tax net for national development – Ofori-Atta

February 24, 2022 / Comments (0)

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Finance Minister Ken Ofori-Atta has said that the proposed E-levy government plans to introduce will widen the tax base of the economy, as it will offer opportunity for all citizens to contribute in revenue generation efforts for national development.

Speaking at the 24th meeting of the Ministerial Committee of the Inter-Governmental Action Group against Money Laundering in West Africa (GIABA), the finance minister said the levy offers a comprehensive system to get all potential taxpayers to contribute their quota to national development – adding that the rate of 1.75 percent and exemption of the first GH¢100 transfer per day means that the tax is pro-poor and a major means of raising adequate revenue to execute government’s growth agenda and job creation for young people.

Mr. Ofori-Atta further said he is hopeful Ghanaians will understand the good intentions of government when the ongoing stakeholder and town hall meetings come to completion.

“Ghanaians are largely in favour of paying the E-Levy, contrary to the impression being created from Parliament; but we have to explain to them the levy’s merits and the positive consequences it will bring,” he said.

He was confident that the levy, which was originally billed to start on February 1 to raise some GH¢7billion, will soon secure parliamentary approval for effective implementation.

The minister cited the upsurge and growth in the value of mobile money transactions from GH¢78billion in 2016 to almost GH¢950billion in 2021 as the basis of targetting users of the platform.

“Mobile money has clearly become a tax handle for the future, and must be utilised in the development of Ghana,” he said.

According to data from the Ghana Revenue Authority, only 2.4 million people pay direct taxes compared to more than 20 million who could have been paying. This, the GRA has maintained, needs to be addressed in order to widen the tax net for revenue growth and national development.

About the levy

According to the minister, the E-Levy will affect mobile money transfers between accounts on the same electronic money issuer (EMI); mobile money transfers from an account on one EMI to a recipient on another EMI; transfers from bank accounts to mobile money accounts; transfers from mobile money accounts to bank accounts; and bank transfers on a digital platform or application which originate from a bank account belonging to an individual to another individual.

What it will not cover

Mr. Ofori-Atta added that certain transactions will be exempt from the E-levy. This, he said, includes cumulative transfers of GH¢100 per day made by the same person; transfers between accounts owned by the same person; transfers for the payment of taxes, fees and charges on the Ghana.gov platform; and electronic clearing of cheques.

It also includes specified merchant payments (i.e. payments to commercial establishments registered with GRA for Income Tax and VAT purposes); and transfers between principal, master-agent and agent’s accounts.

Source: thebftonline.com

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