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E-Levy is a nuisance tax, decrease it to 0.5% - IEA to government

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Mon, 21 Nov 2022 Source:

The Institute of Economic Affairs (IEA) has called for a downward review of government's tax measure - Electronic Transfer Levy (E-Levy).

According to the Director of Research at IEA, Dr John Kwakye, the current 1.50 percent charge, imposed on all electronic transfers above GH¢100 in a day, should be reduced to 0.50 percent.

He explained that the move will rope in everyone including tax evaders and improve government's revenue mobilisation efforts.

Speaking at a press conference in Accra, Dr Kwakye said, “we suggest reducing the rate from 1.50% to 0.50%. By doing so, it may prevent people from trying to evade the levy, and government may in the end rake in more than under the current 1.50% rate.”

It would be recalled that government in March this year imposed a 1.5 percent charge on all electronic transfers above GH¢100 per day.

The tax policy was a move by the goverment to widen the country's tax net but has since courted controversy and widespread backlash since its announcement and subsequent implementation.

The charging entities for the E-Levy are telecommunications companies, commercial banks, special deposit-taking institutions and Payment Service Providers (PSPs).

Government hoped to rake in about GH¢7 billion from the collection of the 1.5 percent levy on mobile money and other electronic transactions, but the figure was revised downwards to about GH¢4 billion recently.

Meanwhile, the Ghana Revenue Authority (GRA) in October this year noted that a total of GH¢328 million in revenue has been accrued from the E-Levy so far.

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