Government imposes 1.75% tax on MoMo and other E-transactions

Finance Minister, Ken Ofori Atta, has announced a 1.75% tax on MoMo (Mobile Money) and all other E-transactions effective January 1, 2022.



The tax, known as the Electronic Transaction Levy, will cover all mobile money payments, bank transfers, merchant payments, and inward remittances above GH₵ 100 and will be borne by the sender.

However, transactions that amount to GH₵ 100 or less in a day or approximately GH₵ 3,000 per month will not be affected by this levy.

This, according to the government, forms part of strategies to widen the country’s tax net and also to enhance financial inclusion and protect the vulnerable in society. Mr. Ofori Atta made the announcement in parliament, today, November 17, 2021, when he was presenting the 2022 Budget.

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“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 stated.

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Finance Minister, Ken Ofori-Atta

 

He added that 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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Portions of the revenue to be collected from the levy will be used to support entrepreneurship, youth employment, cybersecurity, digital, and road infrastructure, among others.

He said, the total value of transactions for 2020 was estimated to be over GHS 500 billion as compared to GH¢78 billion in 2016 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.

It is on the back of this that, the government believes is becoming clear there exists “enormous potential to increase tax revenues by bringing into the tax bracket, transactions that could be best defined as being undertaken in the “informal economy”.

 

Read alsoGhana, Tanzania, Ethiopia and 30 others are on the World Bank’s heavily indebted poor countries’ list


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