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2022 Budget: Govt slaps 1.75% levy on electronic transactions

Source The Ghana Report

The government has proposed a 1.75% phone transactions levy payable by mobile money users per transaction above GH¢ 100.

Presenting the 2022 budget in parliament, the Finance Minister said, the levy will help the government to shore up revenue inflows to fund road projects in the country.

“After considerable deliberations, the Government has decided to place a levy on all electronic transactions to widen the tax net and rope in the informal sector. This shall be known as the “Electronic Transaction Levy or E-Levy,” he said.

“Electronic transactions covering mobile money payments, bank transfers, merchant payments, and inward remittances will be charged at an applicable rate of 1.75%, which shall be borne by the sender except for inward remittances, which will be borne by the recipient”.

The new levy will be effective 1 February 2022.

He said when effective, the levy will not affect people whose monthly transactions totalled GH¢3,000.

According to him, the levy will be called ‘Electronic Transaction Levy or E-Levy’ and a portion of the proceeds from it will be used to support entrepreneurship, youth employment, cyber security, digital, and road infrastructure among others.

“Total value of transactions for 2020 was estimated to be over GHS 500 billion Cedis compared to GH¢78 billion Cedis in 2016 just 5 years ago, while total mobile money subscribers and active mobile money users have grown by an average rate of 18% and 16% respectively between 2016 and 2019. Mr. Speaker, it is becoming clear there exists the enormous potential to increase tax revenues by bringing into the tax bracket, transactions that could be best defined as being undertaken in the “shadow economy”.

He added: “Mr. Speaker, this new policy comes into effect from 1st February 2022. The government will work with all industry partners to ensure that their systems and payment platforms are configured to implement the policy.”

 

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