Parliament Passes Bill to Abolish E-Levy, President Mahama’s Assent Expected
In a significant development, Ghana’s Parliament has passed a bill to abolish the Electronic Transfer Levy (E-Levy), a tax that has been widely criticized for its impact on digital transactions and the economy. The E-Levy, which was introduced in 2022, imposed a 1.5% tax on electronic transactions such as mobile money transfers, bank transfers, and online payments.
The levy faced significant opposition from the public, businesses, and political figures, who argued that it disproportionately affected low-income earners and the unbanked population. Many Ghanaians felt that the tax was unfair and burdensome, and that it stifled the growth of digital transactions and the economy.
Despite its intended purpose of generating revenue for infrastructural development, the levy was widely criticized for its impact on the poor and vulnerable. Many argued that the tax was regressive, meaning that it affected the poor more than the rich, and that it undermined the government’s efforts to promote financial inclusion and digital payments.
Now, the bill’s passage marks a significant step towards scrapping the levy, but its future lies in President John Mahama’s hands, who is expected to give his assent. Interestingly, President Mahama and the NDC had promised to abolish the tax during their campaign ahead of the December 2024 general elections.
The abolition of the E-Levy is seen as a victory for those who argued that it was an unfair tax on the poor and vulnerable. However, it’s worth noting that the levy was expected to generate significant revenue for the government, with estimates suggesting it would bring in GH¢6.96 billion in 2022, GH¢7.89 billion in 2023, GH¢8.92 billion in 2024, and GH¢10.09 billion in 2025.
As the country waits for President Mahama’s assent, many Ghanaians are celebrating the potential abolition of the E-Levy. The move is seen as a significant step towards promoting financial inclusion, digital payments, and economic growth. However, it remains to be seen how the government will make up for the lost revenue and ensure that its infrastructural development projects are funded.
