E-levy will increase Ghana’s tax-to-GDP ratio

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E-Levy
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Mr Isaac Kwabena Amoako, a member of the E-Levy Technical Committee, says the collection of the E-levy will increase the country’s tax-to-Gross Domestic Product ratio from 12.5 per cent in 2021 to 20 per cent by 2024.

He said out of the country’s population of over 30 million, only 2 million people paid direct taxes of which 12 million were active workers.

The e-levy, he said, was among interventions to bring on board informal sectors and other organisations or institutions on the country’s tax net.

Mr Amoako said this at a sensitization programme for some identifiable groups  on the implementation of the Electronic Transfer Levy Act,2022 (Act 1075), organized by the Ghana Revenue Authority (GRA).

The Act imposes levy on all applicable electronic transfers made other than electronic transfers that are excluded under the Act.

Government’s decision to introduce the levy, he stated, was to enhance domestic tax mobilisation and expand the tax base and provide opportunity for the citizenry to contribute towards national development. 

Mr Amoako, who is also the Head of Project Management Team of GRA, said the levy did not apply to persons who withdraw money from their mobile money wallet.

He explained that transfers that were not covered by e-levy include cumulative transfer of GHS 100 per day made by the same person using mobile money and transfer between accounts owned by the same person.

“For example, a transfer from Naa’s AirtelTigo wallet to her MTN wallet or from her Fidelity bank account to her Prudential bank account or from her CalBank savings account to her current or investment account will not attract the Levy because Naa has linked all accounts with her Ghana Card,” he said.

Other transfers that do not attract e-levy charges are transfers for the payment of taxes, fees, and charges, electronic clearing of cheques,Specified Merchant Payments,and transfers among principal, agent, and master-agent accounts.

He explained that, in the Act, transfers that fall under the E-Levy were mobile money transfers done between wallets on the same electronic money issuer, sending money from ones Vodafone Cash wallet to another person’s AirtelTigo wallet, transfers from bank accounts to mobile money wallets, transfers from mobile money wallets to bank accounts and bank transfers on an instant pay digital platform or application which originates from a bank account belonging to an individual.

“For example, Kwame transferring money from his ADB account using the ADB App to Akua’s National Investment Bank account,” he said.

He said the levy was charged by mobile money providers like MTN Momo, Vodafone Cash, AirtelTigo Money,Zeepay, GCB G-Money, and Yup Ghana and

Payment Service Providers like e-Tranzact, JuniPay, Korba,Nsano, banks like Consolidated Bank Ghana, GCB Bank, ADB and Specialised Deposit-Taking Institutions such as Rural and Community Banks, Savings and Loans Companies, Finance Houses and other Financial Institutions prescribed by Regulations.

Responding to concerns from the participants on wrong deductions, Mr Amoako said any undue deductions should be reported to the appropriate sector for refund.

He said from July 1, 2022, tax payers can only used Ghana Card for refund of any wrong deductions.

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