The Chief Executive Officer of the Ghana Chamber of Telecommunications, Ken Ashigbey, has said that the introduction of the 1.75% levy on electronic financial transactions is ill-timed.
He said the chamber was not consulted by the government on the proposal before the announcement was made in Parliament on Wednesday, November 17, 2021.
“When we got this information, it was surprising because there had not been any prior engagement to discuss this e-levy. The timing of taxing this nascent industry is not now, and we needed to let it [the industry] grow, defeat cash before we attempt any form of taxation,” he said.
The Minister for Finance, Ken Ofori-Atta, during the reading of the 2022 budget before Parliament on Wednesday said the government is introducing a 1.75% tax on electronic payments as part of efforts to raise revenue to support the government’s development agenda including maintenance of roads.
The transactions to be impacted by the tax include Mobile Money transactions, inward remittances and ATM withdrawals.
The announcement has been met with mixed reactions, with many Ghanaians kicking against it entirely, while others have asked that it be reduced.
According to Ken Ashigbey, the chamber is looking forward to engaging the government and other stakeholders on the tax.
“The Minister of Finance made mention of the fact that in the deliberation on this tax, they sought to protect the government’s financial inclusion agenda as well as the vulnerable in society. He also added the fact that there would be engagement with industry, so we hope that this engagement with the Ministry and the GRA and other regulators will determine how this tax will be implemented,” he said.
Mr. Ashigbey further noted that there is a potential for “double taxation and also making the electronic purchase of goods and services very expensive,” which may encourage people to reverse to using cash.