Ghana’s Parliament has approved the contentious Electronic Levy bill (E-levy) which several polls said is highly unpopular.
The House approved the bill on March 29, 2022, despite a walkout by the minority, who said the levy will hurt the poor and hamper efforts to promote financial inclusion.
The Finance Minister, Mr Ken Ofori-Atta, who was in the House during the passage, announced a reduction in the levy to 1.5 percent from the initial 1.75 percent proposed by government. He noted that the bill’s objective is to broaden the tax base of the country by imposing the levy on electronic transfers to enhance the government’s revenue mobilisation.
The E-levy was introduced by government in the 2022 Budget for basic transactions related to digital payments and electronic platform transactions. The rate applies to electronic transactions that are more than GH¢100 on a daily basis.
The Government has clarified that the levy is different from the 1 percent telcos currently charge on transactions.
After it was announced in the 2022 Budget statement, the E-levy sparked controversy due to fears that it will lead to double taxation—worsening the economic plight of the ordinary Ghanaians. The bill’s opposers have lamented that it will hit the hardest low-income earners who rely on daily mobile money transfers to survive.
The President, Nana Addo Danquah Akufo-Addo signed the bill into law within 48 hours after it was passed by Parliament. The Presidential assent defied a suit filed at the Supreme Court by three members of the Minority in Parliament to challenge the passage of the levy.
