Life-changing News

E-levy: Convert MoMo accounts into bank accounts

And slap 5% turnover tax on account holders without TIN

David Ofosu-Dorte, Chairman of AB & David Africa is of the view that, instead of the introduction of the Electronic Transactions Levy (E-Levy), MoMo accounts should have been used to open regular bank accounts and bring the unbanked into the banking ecosystem.

He argued that this is doable since all Mobile Money accounts have a Ghana Card database of the holders.

Ofosu-Dorte made the call while delivering the 3rd Constitution Day Public Lecture in Accra.

It is organised by UPSA Law School in collaboration with OneGhana Movement, a thought leadership and social action Not for Profit organization.

It was under the theme, “The 1992 Constitution – A fundamental law for our prosperity or a well crafted guide for our economic doom.”

Ofosu-Dorte explained that government should then introduce 5% turn over tax to be charged on all the bank Accounts created for which the owners do not already have Tax Identification Numbers (TIN).

The business lawyer with a special focus on Africa transactions and projects stated that the 5% turn over tax will be charged on total amount channeled through such accounts.

MoMo accounts, E-levy, Newscenta, bank accounts, turnover tax, TIN,

Providing further details, Ofosu-Dorte  said persons who feel the pinch of the 5% turn over tax will acquire TIN.

Buttressing his position, he noted that such a move will help the Ghana Revenue Authority (GRA) to expand the tax net which is needed to increase revenue generation.

On 17th November 2021, the Minister for Finance announced during the presentation of the 2022 Budget Statement and Economic Policy of Government to the Parliament of Ghana, the introduction of an “Electronic Transaction Levy” or “E-Levy” of 1.75% on electronic transactions above GH₵100 per day to take effect from February 1, 2022.

In March 2022, Parliament passed the Electronic Transfer Levy (Amendment) Bill, 2022 to improve tax revenue mobilization by tapping into fast-growing digital financial services.

Implemented in May 2022, with a modified phased approach where the charging entities temporarily used their own systems to assess and charge the Levy, in July same year, the next phase saw the introduction of the Ghana Revenue Authority (GRA) Common Platform for the assessment of the levy.

The government received several proposals for the review of the levy and worked with stakeholders to evaluate its general impact to decide on the next line of action.

The performance of the policy did not meet expectations because of its rate, which the public thought was too high.

As a result of consultations with stakeholders, the rate of the levy was reduced to one per cent of the transaction value.

In December 2022, the bill to amend the Electronic Transfer Levy Act, 2022 (Act 1075) to reduce the levy on electronic transfers from 1.5% to one per cent was passed.

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