E-Levy affects the poor more than the rich - Research

Research conducted by the International Centre for Tax Development (ICTD) has shown that the Electronic Transfer Levy rolled out by government in 2022 has had dire consequences on the poor than the wealthy in society.

In an interview with the media, a Research fellow at the International Centre for Tax Development, Martin Hearson, said inasmuch as the E-Levy generates a lot of revenue for the state, it has affected the poor more than the rich.

Speaking on the theme; Taking Mobile Money - Lessons and ways forward, Mr Hearson said "The E-Levy in Ghana is an important tax. It is raising a billion cedis of revenue each. It is also a clearly a tax that is going to be reviewed and debated in the election campaign this year so it is important that we have strong solid research to base the discussion."

"We looked a little bit at the impact on individuals and we found that the tax does affect the poor more than it affects wealthier people..." he added.

Martin Hearson however stated that the growth in the mobile money market has seen a modest growth as its usage continues to spike despite the E-Levy.

"There's some concern that maybe when you introduce a tax such as this, may affect the growth in the mobile money market, actually, that the impact that we saw was only modest and only temporary and in the long run, it seems that the growth in mobile money usage has continued in spite of the tax," the research fellow at ICTD said.

The introduction of E-Levy in May 2022, according to the government formed part of measures to help improve its domestic revenue mobilization.

Following several criticisms, the E-Levy tax was reviewed downwards from 1.5% to 1%.

Data from the Ghana Revenue Authority shows that an amount of GH¢600million was collected in 2022.

In 2023, a total of GH¢1.2billion was raked in as revenue from the E-Levy.





SA/NOQ

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