The Electronic Transfer Levy, commonly known as “E-Levy,” is one of the few policies, alongside Free SHS, that significantly influenced the just-ended elections with both leading contenders pledging to abolish it.
However, the Ghana Union of Traders Association (GUTA), is urging President John Dramani Mahama, to reconsider his decision to scrap the levy.
The Akufo-Addo administration introduced the levy in 2022 under Act 1075, later amended through the Electronic Transfer Levy (Amendment) Act 2022 (Act 1089). It imposes a 1%percenttax on the value of electronic transactions.
Interestingly, Dr Mahamudu Bawumia, even the then New Patriotic Party (NPP) flagbearer and sitting Vice-President, publicly opposed the levy, which some described as part of the many “nuisance taxes” that the Akufo-Addo administration imposed on Ghanaians.
Also complained of was the Emissions Levy passed in 2023 under Act 1112 as a tax on carbon dioxide emissions from vehicles and certain industries. The levy went into effect on February 1, 2024.
But Dr Joseph Obeng, President of GUTA, hold a contrary view and has called for the retention of the levy. “I would suggest that, if possible, the government should not abolish the E-Levy,” he stated.
Despite this, Joyce Bawah Mogtari, Special Aide to the new President, reassured the public that the Mahama administration, is committed to abolishing the E-Levy and the COVID-19 levy, as promised during the campaign.
Dr Joseph Obeng, explained that the proceeds from the tax should be used to support Ghanaian traders, particularly small and medium-sized enterprises (SMEs) including the President’s proposed Women’s Development Bank.
“We can use the proceeds from the E-Levy to provide access to finance for SMEs and for the women that the President is so concerned about.”
Before winning the 2024 election, President Mahama promised to abolish the E-Levy, which was introduced by the Akufo-Addo government.
In his campaign to empower SMEs, he also promised to establish a Women’s Development Bank—a financial institution that would offer loans to women at low interest rates.
Dr Obeng, argued that the President would need money to establish the bank and suggested that the E-Levy could serve as a potential source of revenue to support this initiative and help various SMEs.
“This is my view, and I am expressing it because if we want to raise funds to support the informal sector, SMEs, and women, we must also think about how to generate this money.”
He added, “I have already said that we should rationalise taxes, and if there is one tax I would recommend maintaining, it should be the E-Levy. It is not only businesses that pay this tax—it is paid by all of us. Moreover, it is an existing tax that is already in place and is ongoing.”
Dr Obeng was speaking on JoyNews on Wednesday, January 8.
The E-Levy, introduced by the Akufo-Addo government, was designed to broaden the country’s tax base and generate revenue for national development.
However, the tax has faced significant criticism from many Ghanaians. In response to the backlash, the government reduced the initial 1.5% charge to 1%.
Joyce Bawah Mogtari, reiterated the National Democratic Congress (NDC) government’s commitment to abolishing the controversial Electronic Transfer Levy (E-levy) and the COVID-19 levy.
This pledge, a key feature of the NDC’s 2024 manifesto, aims to provide relief to Ghanaians burdened by these levies.
Speaking on the matter, Madam Bawah Mogtari assured the public that the government remains resolute in its determination to deliver on this promise, emphasizing its dedication to easing the financial pressures on citizens.
“The E-levy has been a significant concern for many citizens. In a country where several banks have collapsed, some intentionally, mobile money services have become the main avenue for financial transactions. It is critical to ensure that this platform remains accessible and affordable for all. These levies will be scrapped,” Joyce Bawah made these remarks during an interview on JoyNews’ AM Show.
She expressed disapproval of the 1.5percent rate of the levy, comparing it to other nations, where taxes are limited to 0.5percent.
In her view, the increased rate has rendered the levy burdensome for the average Ghanaian, emphasizing its wider consequences, particularly its effects on international development.
“For those who have no other options but to transact business using mobile money, this levy is not just inconvenient but stifling.
“Many development partners used to distribute resources through mobile money platforms. However, the introduction of the E-levy has disrupted these processes, adding unnecessary strain to an already fragile system.”
Additionally, Joyce Bawah, questioned the continued collection of COVID-19 by the Akufo-Addo administration years after the pandemic had subsided.
“If we still have these levies in place and yet have not completed crucial projects like Agenda 111, we need to ask ourselves whether these levies serve their intended purpose..”