FLASHBACK: How to avoid paying E-Levy on some transactions - Expert explains

A member of the E-Levy committee, Isaac Kobina Amoako, explained some transactions that will not be affected by the electronic transactions.

He said, “What you can do to be safe is, on the MOMO platform, there’s a difference between a transfer and a payment. People use transfers to make payments, so to be on the safer side, go to the payment option and make a payment. For example, when you go to a barbershop, and you have to pay, say 200cedis, the barber may have displayed his MoMo number in his shop, when you go to your MoMo App and you transfer 200 to him, then the E-Levy will apply. You should rather encourage the barber to register as a merchant on the MoMo platform so that next time when you are paying him, you don’t do a transfer, you go to MoMo pay or pay the bill, and if that barbershop is registered with the Ghana Revenue Authority that entire amount will not attract any charge.”

Read the full story originally published on April 18, 2022, by GhanaWeb

The GRA announced that it is working with the telecommunication companies to ensure that the right structures are put in place to be able to start collecting the E-Levy on May 1.

The 1.5% levy will be charged on electronic transactions above 100cedis.

Meanwhile, the E-Levy policy has received several backlashes from the business community, especially those in the informal sector.

According to them, the levy will mean an increase in the cost of their transactions.

But a member of the E-Levy committee, Isaac Kobina Amoako, has explained that payments for services using the payment option on Mobile money will not attract the E-Levy.

Speaking on TV3, he stated that only transfers will attract the levy and not payments.

According to him, when a business is registered with the Ghana Revenue Authority and is registered as a mobile money Merchant, then customers can use the payment option to enjoy the exemption from the E-Levy.

He said, “What you can do to be safe is, on the MOMO platform, there’s a difference between a transfer and a payment. People use transfers to make payments, so to be on the safer side, go to the payment option and make a payment. For example, when you go to a barbershop, and you have to pay, say 200cedis, the barber may have displayed his MoMo number in his shop, when you go to your MoMo App and you transfer 200 to him, then the E-Levy will apply. You should rather encourage the barber to register as a merchant on the MoMo platform so that next time when you are paying him, you don’t do a transfer, you go to MoMo pay or pay the bill, and if that barbershop is registered with the Ghana Revenue Authority that entire amount will not attract any charge.”

According to him, it is important for players in the informal sector to contribute to the nation’s development by paying taxes which they are currently not doing.

For this reason, he emphasized that informal sector workers should be encouraged to register with the Ghana Revenue Authority so as to be roped into the tax net.

“For you as a salaried worker, when you receive your pay slip, check how much you pay as tax but the plumber or artisan receives about 5,000 or more for services they provide, but do not contribute anything to the nation’s development even though they benefit from social amenities [security, hospitals, roads etc]. So, if we can contribute to bringing this person who is not in the tax net into the tax net by just doing this favour by just checking if this person is registered with the GRA whiles encouraging them to do so, I believe you’ve done your civic duty.”

Isaac Kobina Amoako, however, wants every citizen to try as much as possible to convince informal sector workers to pay taxes.

According to him, the exemption for persons registered with the GRA is a way to encourage more people to apply.

“The total staff of GRA is not more than 6,000 but about 15 million Ghanaians who are actively doing some form of work and if these 15 million people are just checking everyone in the informal sector to go to the GRA and get registered, look at the number of people that we will rope into the tax net if we just do this simple exercise.

"It is like an impediment that we are putting in the way to make it unattractive for you to deal with somebody who is not regular with the state. So if it is painful enough for your best hairdresser to charge for the service she provides, just tell the hairdresser, let me take your hand and take you to the GRA and once she does that and you pay her through MoMo pay you don’t pay for E-Levy, he added.”