E-Levy: Analyst Predicts An Increase In Cheque Transactions By ‘Tax Sensitive’ Ghanaians

E-Levy: Analyst Predicts An Increase In Cheque Transactions By ‘Tax Sensitive’ Ghanaians

  • A financial analyst has predicted a high increase in the use of cheque transactions following the passage of the E-Levy
  • Dr Benjamin Amoah has said at least 46% of mobile money users will ditch the service in response to the 1.5% tax
  • Also, the projected GHS6.9 billion annual revenue will suffer a deficit because that projection was based on an initial 1.75% rate that was later reduced to 1.5%, according to Dr Amoah

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A financial analyst has predicted an increase in cheque transactions among Ghanaians and businesses and a dip in mobile money transactions in response to the E-Levy passage.

Executive Director, Center for Economics, Finance and Inequality Studies (CEFIS), Dr. Benjamin Amoah, has said that because cheque transactions attract no taxes, “tax-sensitive” Ghanaians will move away from mobile transactions that attract a 1.5% levy.

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cheque momo
The recently passed 1.5% E-Levy remains a contentious tax. Source: Instagram/@fillaboyzdotcom
Source: Instagram

He also said a major deficit will hit the government’s projected GHS6.9 billion annual revenue.

He explained that research conducted by CEFIS before the E-Levy was passed shows that as many as 46% of Ghanaians have said they will stop mobile money transactions if the tax is implemented.

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“Mind you, the GHS6.9 billion was based on the initial 1.75%, now it is going to be 1.5%, so if you do a recalibration of that 1.5% based on the initial [GHS6.9 billion], then you can see that clearly, the numbers in terms of how much can be mobilised will drop,” he told Joy Business.

Ghana’s Parliament has passed the controversial E-levy tax bill Tuesday, March 29, 2022, after the Minority group staged a walkout.

After a long absence to allow for broader stakeholder consultation, the bill was sprung on the House under a certificate of urgency on Tuesday.

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After the Minority MPs walked out of the House after the bill was scheduled for voting during proceedings, the one-sided House of Majority MPs passed the bill.

The Minority side walked out of Parliament shortly after protesting the surprise scheduling of the bill in the order paper for Tuesday.

Many analysts have criticised the 1.5% tax to be charged on electronic transactions as regressive to the campaign for a cash-lite economy. Others have also said the new charges will intensify the hardship in Ghana.

E-Levy: Mobile Money Agents Threaten To Shut Down Businesses Over Passage Of Bill

Mobile money operators have warned that they may be forced to shut down their businesses following the passage of the E-Levy bill on Tuesday.

An association representing over 1,000 mobile money agents across the country has said its members are deeply concerned about the repercussions of the bill's passage on their incomes.

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E-Levy: 'We’ll withdraw our services' – Momo agents warn after passage of bill

On Tuesday, March 29, 2022, the Mobile Money Agents Association of Ghana told Citi News that their business is already faced with setbacks that will be worsened by the new 1.5% to be charged on some transactions.

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George Nyavor (Head of Politics and Current Affairs Desk) George Nyavor writes for YEN.com.gh. He has been Head of the Politics and Current Affairs Desk since 2022. George has over 9 years of experience in managing media and communications (Myjoyonline and GhanaWeb). George is a member of the Catholic Association of Media Practitioners Ghana (CAMP-G). He obtained a BA in Communications Studies from the Ghana Institute of Journalism in 2010. Reach out to him via george.nyavor@yen.com.gh.