Tanzania Scraps E-LEVY, Will Ghana Follow Suit?

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E-Levy
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Beginning October 1, 2022, Tanzanians will wave goodbye to transfer fees on withdrawal of cash through bank and mobile money agents and ATMs for Tsh30,000 ($12.81) and below, thanks to government policy.

The government is waiving transfer fees to encourage more people to use mobile money and other digital finance services after its taxes on such transfers caused people to shun those services.

Tanzanians had been using digital finance services extensive to the point that its MoMo market reached a value of $54.5 billion in 2021.

But they began to shun the MoMo after the government introduced transaction levies to provide basic services for its citizens in the financial year 2021/2022.

More and more Tanzanians stopped using mobile money services after the government introduced taxes on mobile money transfer and withdrawal transactions on July 15, 2021.

People even took a step further and withdrew their assets from their mobile money accounts and began paying directly with cash instead.

The plummet continued until September 2021 when the government slashed the taxes it introduced by 30%. Seeing that the reduction of charges improved the situation in the mobile money scene, the government took off another 43% from its mobile money transaction levy three months ago. Now it has scraped the whole thing off.

To get the money it is now foregoing in the annulment of bank charges, the government plans to reduce the expenses it makes on things like conferences, training, refreshments, and trips. Hopefully, its citizens go back to using mobile money services again and the country can grow its mobile money market to $120.4 billion by 2027, as experts predict.

Mobile money taxes such as the one being scrapped in Tanzania have been implemented in countries like Uganda, Cameroon, and Zimbabwe. They have particularly been met with public criticism by the Cameroonian people.

Ghana 

E-levy has failed woefully in Ghana, but the government has remained adamant and is still keeping it around.

Government had projected to raise at least GHS1.46 billion from e-levy in the first two months but it was able to raise a paltry GHS93 million, which is less than 10% over the period.

Further down the lane, government reported raising just about 7% of its target revenue from e-levy. This is because citizens have been finding other ways around the e-levy due to the fact that times are hard in Ghana and everyone is trying to cut their losses.

Techgh24 believes it is time the Ghana government took a cue from Tanzania and indeed, several other African countries where e-levy had failed and annul the tax completely.

Indeed, the leader of the biggest opposition party in the country, John Mahama of the NDC has promised to abolish e-levy if he is made president in 2024.

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