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E-levy is for development – Hon. John Kumah

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Hon. Ken Ofori-Atta, the Finance Minister, announced that the government intends to introduce an electronic transaction levy (e-levy) in the 2022 budget. This announcement has caused citizens to declare their displeasure but Deputy Minister, Hon. John Kumah has stated that the levy is for development.

The proposed levy is expected to come in effect from February 2022. It involves a charge of 1.75% of the value of electronic transactions. It covers mobile money payments, bank transfers, merchant payments, and inward remittances.

In an engagement with some bloggers at a meeting, Hon. John Kumah stated that the introduction of the e-levy was to generate internal revenue to improve development in the country. He revealed that government cleared and reduced 5 existing levies including the toll booth levy to reduce the taxes citizens pay.

Below are some information relating to the e-levy:

1. THE E-LEVY IS NOT APPLICABLE TO ALL MOBILE MONEY TRANSFERS 

The levy will cover the following;

Bank to Mobile Money Transfers: Transfers from a bank account to another person’s mobile money account

Mobile Money Transfers: sending money from your wallet to another person’s wallet or bank account using mobile money;

Mobile Money Merchant Payments:  when you pay for a service or a product from a merchant using your mobile money account;

The levy will NOT cover the following;

Transfers between your own accounts: If you are moving money between your own mobile money accounts you will not be charged the E-LEVY. For instance, If you transfer money from your registered mobile money account with MTN to your Vodafone Cash bearing the same name, the e-levy will not be charged on the transfer.

Daily Free Limit: You will able to send up to GHS100 / day without payment of the levy. For example, if you send GHS 50 to a friend in the morning and send another GHS 50 (GHS 100 in total) to your brother in the afternoon, you will not pay the E-levy. However, any other payment on the day after this threshold will attract the e-levy.

Cash deposits: Depositing money into one’s personal mobile money account will not be charged with the e-levy. For example, if you deposit 1,000gh through a mobile money agent into your account, no e-levy charge will be taken and you will receive 1,000gh in your account.

2. THE E-LEVY IS NOT APPLICABLE TO BANK TRANSFERS AND CHEQUES

Although the E-levy will be applied to the originator of a transaction on an electronic payment platform like online banking, it only covers payments for goods and or services using bank payments, Debit/Credit Card or alternative bank payment channels.

The levy will not be applied to Bank transfers and cheques from one bank account to another. 

Also, money transfers between one’s own account in different banks will not be taxed. For example, by transferring money from one’s GCB bank account to his/her  Fidelity Bank account, the e-levy will not be applied to the amount transferred.

3. ONLY THE RECEIVER OF AN INWARD REMITTANCE WILL BE CHARGED THE E-LEVY

An inward remittance is a money sent from a foreign country and received by the payee into their bank account. Under the new proposed e-levy, the remitter who sends money to the recipient’s bank account will NOT be charged. Only the beneficiary of the internal remittance will be charged 1.75% on the value of the amount received.

On how issues and challenges about the levy will be addressed, Hon. John Kumah said a 24-hour service center will be set up to help individuals who might be experience challenges and call lines will be announced soon.

Watch Hon. John Kumah speak on the benefits of the E-levy below.

Source: AMEYAWDEBRAH

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