The Electronic Transactions Levy (E-levy) Act will be reviewed, with a focus on lowering the headline charge from 1.5% to 1% of transaction value and removing the daily threshold, according to Mr. Ken Ofori-Atta, Minister of Finance and Economic Planning.
During the introduction of the 2023 Budget Statement and Economic Policy on the floor of Parliament, Ofori-Atta made this announcement.
Unless specifically exempted by legislation, all electronic money transfers are subject to the E-Levy.
It was implemented to broaden the tax base, increase domestic tax collection, and provide everyone the chance to support the advancement of the country.
E-levy collection began on May 1, 2022, and as of the end of September 2022, it had amassed GH328.80 million.
Electronic transfers are subject to a 1.5% fee under the Electronic Transfer Levy Act of 2022 (Act 1075).
At the time of transfer, the transferor is charged with the Levy.
The organizations specified in the Act’s First Schedule are responsible for collecting the Levy.
It must be proven that the anticipated revenue would have been realized if the 1.5% tax had been imposed uniformly, as was the original plan.
However, the government had to exempt a larger number of transactions due to strong opposition to the e-levy.
Along with the exemptions, some people have also discovered a clever technique to avoid the e-levy.
The rise in cash-in or deposit transactions is the result of some consumers’ desperate attempts to evade the E-Levy.
Because E-Levy is not applied to withdrawals from Momo wallets, if people wish to send money to someone, they advise them to see an agent and authorize cash out.
After sending his or her ID number, the sender completes the transaction.
The revenue generation has been impacted by these and other tactics.
Data from the BoG show that the value of transactions has barely decreased.
Therefore, venues would have been closer to expected figures without exemptions and evasions.
According to Ofori-Atta, the government would expedite the implementation of the Unified Property Rate Platform Programme in 2023 as part of an aggressive domestic revenue mobilization.
In order to fund the government’s strategy for digitalisation and roads, the Minister has also suggested a 2.5% increase in VAT.
At each stage of the production and distribution process, VAT is applied on the value added to goods and services.
It is incorporated into the total cost that the consumer pays for the goods or services.
The National Health Insurance Levy (NHIL) and the Ghana Education Trust Fund Levy (GETFund Levy) were delinked from the VAT by the 2018 Mid-Year Budget, which also changed the VAT rate from 15% to 12.5%.
The Minister stated that the Government would expedite the implementation of the Unified Property Rate Platform Program in 2023 as part of an aggressive domestic revenue mobilization.
In order to increase domestic production capacity, the government had also suggested a number of other initiatives, such as funding extensive agricultural and agribusiness interventions through the Development Bank Ghana and Agriculture Development Bank.
The Minister said that institutions in the public sector that depended on imports for either inputs or consumption would face a 50% surcharge. The Ghana Audit Service and the Internal Audit Agency would work together to ensure compliance.
Mr. Ofori-Atta stated that the country’s agricultural productivity would be increased in order to promote the consumption of local products including rice, vegetable oil, chicken, and fruit juice.
Source: newsthemegh.com