How to make the E-Levy work

E Levy E Levy Electronic Transfer Levy1.png File photo: E-Levy

Mon, 29 Aug 2022 Source: Osei Tutu

Paying tax is not something anybody does with relish. People will always do their best to avoid paying tax especially if the tax is punitive and avoidable at the same time as the E-Levy has proven to be.

So far the E-Levy is generating less than 10% of its projected revenue target and this is not something the leadership would be happy about.

It is therefore incumbent upon the leadership to think through the E-Levy thoroughly and come up with a strategy that will make the tax less punitive and unavoidable.

For a start I wish to make these suggestions for the consideration of the leadership;

1. Reduce the rate of the E-Levy from 1.5% to 1%.

2. Make the sender pays 0.5% and the receiver 0.5%

3. Remove the minimum threshold so that the E-Levy is payable for every transaction.

4. Impress upon the telcos to reduce the rate of their service charge to 1%: 0.5% to be paid by the sender and 0.5% by the receiver.

5. Remove the minimum threshold with respect to the service charge of the telcos as well, so that they will also get their share in every transaction.

With this strategy, the sender will

pay 1% charge: 0.5% as E-Levy and 0.5% as the telcos service charge.

Also 1% will be deducted at the receiving end: 0.5% as E-Levy and 0.5% as the telcos service charge applicable to all transactions.

In, this case, the tax will be less punitive and also unavoidable. It might not yield the right amount originally envisioned but will definitely generate far more than it is generating now.

Columnist: Osei Tutu