Government of Ghana Abolishes Disputed 1% Electronic Tax Fee
The Ghanaian government has announced the abolition of the 1% Electronic Transfer Levy (E-Levy) effective April 2, 2025. This decision, made through the Electronic Transfer Levy Act, 2022 (Act 1075) and its 2022 amendment (Act 1089), comes after widespread backlash since the E-Levy's rollout in May 2022.
Entities such as banks, mobile money operators, and payment platforms have been instructed to stop using the E-Levy as of the mentioned date. However, outstanding E-Levy charges from transactions before April 2, 2025, must be filed and paid.
One of the immediate implications of this move is that entities are required to refund any E-Levy deducted from customers starting from April 2, 2025. The GRA has not yet set a clear timeline for reporting these refunds, but entities are expected to establish a swift refund process.
The E-Levy was intended to boost Ghana's revenue amid a fiscal crunch. In 2023, it raised GHS 1.2 billion, significantly less than the projected GHS 4.5 billion annually. This revenue gap may pose a challenge for the government post-E-Levy abolition.
Analysts view the abolition of the E-Levy as a populist move by Ghana's government to win public favor post-election. The E-Levy, despite its intended purpose, has been criticized for its burden on low-income Ghanaians and its impact on digital financial growth.
The abolition of the E-Levy may lead to an increase in digital payment adoption among Ghanaians, addressing one of the concerns raised during its implementation. However, charging entities may face logistical hurdles due to the need for refunds and outstanding payments, particularly smaller players.
It's important to note that this article focuses on the E-Levy and its abolition. Recent tax reforms in Ghana, including the abolition of the COVID-19 levy and changes to the VAT system, aim to address tax neutrality concerns and improve economic conditions. However, there is no mention of the E-Levy in the provided context.
As always, it's crucial to consult additional sources or official announcements from the Ghanaian government for the most accurate and up-to-date information on tax-related matters.
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