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2022 Budget Tax Components: A Detailed Analysis of The E-Transactions Levy

Analysis of The E-Transaction Levy

The Nana Akufo-Addo government through the Minister of Finance, Mr. Ken Ofori-Atta has presented the 2022 budget and fiscal policies to the Parliament of Ghana for onward debate, appropriations, approvals, and disapprovals. Here, we have a detailed analysis of the e-transactions levy, a new tax component the government intends to introduce if Parliament gives the green light.

Averagely, Ghanaians were expecting many ‘goodies’ other than the introduction of a new tax that will in the short term take more from them than satisfy their ever unending needs. But the only hope they can lean on is the Parliament of Ghana, which has the power to reject wholly or partly, the financial document laid before it on behalf of all Ghanaians.

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Ken Ofori-Atta, Minister of Finance, Ghana
Ken Ofori-Atta, Minister of Finance, Ghana

Detailed Analysis of The E-Transactions Levy

Here is a detailed analysis of the government’s new tax component which is named the e-transactions levy, a short name for electronic transactions levy.

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The Government Charges More Than The Telcos and Banks

Banks and telecommunications networks charge a 1% levy on monies transactions that are made electronically in order to maintain their systems.

GCB Bank Ltd does not charge monies transferred from one account to the other. The bank does not also charge monies that are transferred into its own mobile money systems, G-Money except to mobile money services of other telcos. But all this is about to change as the government has decided to slap a 1.75% levy on all the above transactions.

MTN, Ghana’s biggest network charges 1% on all monies that are from GH¢1000.00. This means that if you’re transacting in amounts that are more than GH¢1000.00, you’re only charged on the initial 1k and the rest is free. But this well is about to change as the government will also be charging an extra 1.75% tax on the customer.

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There Will Be Multiple Charges on The Same Money

This is where it gets more interesting than ever. Actually, your little earning is at a greater risk of disappearing just on taxes. Here, the same money can be taxed as many times as possible once it is transferred electronically.

For instance; You’re a teacher. You pay a PAYE tax of at least GHC247. You receive GHC1500. Because you’re in the village you transfer from your bank to momo, bank charges 1% and government charges 1.75% on the same money.

You go to withdraw from momo and MTN charges 1% on GHC1000 and free on anything above that, the government then charges 1.75%. You send 200gh to mom, the same story, when you pay your TV subscription, the same story

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Mobile Money Operators Will Pay on Bank Transfers

Transfers of monies from mobile money merchants account into bank accounts for onward withdrawals are free actually. But with the e-transaction levy, every one of these monies will be taxed on a percentage of 1.75%.

If you are a MoMo merchant and at the end or the start of the day you need GH¢10,000.00 for your operations, you may want to consider other means because you may be paying up to GH¢160.00 on that money you intend to send to your bank.

Traders and Hawkers Will Risk Losing Their Savings

Many traders and hawkers in Ghana transact their purchasing businesses by making others which are delivered to them at a fee. By the new tax initiative, every amount of money a trader transfers to his/her wholesaler takes up the 1.75% charge.

For instance; If you want to make an order of goods worth GH¢5,000, the transfer of that amount after being charged by your telco again receives an extra tax of GH¢87.50 which is charged to the government.

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A Fall In MoMo  Transactions Leading To Operators Folding Up

Because many people will be paying more on charges and tax as a result of this new tax, there will be the need to find cheaper options for doing business. Many people may consider traveling to transact their business than making orders.

For instance, if you are to pay a GH¢87.50 tax on goods worth GH¢5,000.00 and additional monies for delivery, you may consider traveling to get these things yourself which will result in a drop in the services and revenues of mobile money agents.

What do you think?

Written by Trendsmaniac.com

Trendsmaniac.com is a team of research-oriented staff that uses their expertise to deliver quality and useful travel and tourism guides as well as biography information of public figures whose info is needed on day to day basis.

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