In spite of the disruption it has caused to the agenda for financial inclusion, Dr. Ernest Addison, governor of the Bank of Ghana, has stated that it is not yet time to abolish the electronic payment levy (E-levy).
The mobile money platform registered a value loss of GH16.3 billion in May, the exact month the levy was applied, from the GH87.7 billion recorded in April, according to data released by the central bank.
The value of transactions then reached GH77.4 billion in June, a decrease of GH10.3 billion from April’s figures but an increase over the GH71.4 billion recorded in May.
Mobile money suffered another blow in terms of transactions as platform activity fell by 25 million since April, from 403 million to 378 million in June.
Additionally, the amount in users’ wallets on the payment platform, or the balance on float, has decreased to GH9.3 billion, losing GH300 million since April.
There have been calls for the tax to be eliminated because of these severe disruptions, which are largely attributable to customers’ discontinuing or decreasing use of the platform. This is especially true given that the Finance Ministry has publicly acknowledged that the tax has only generated less than 10% of the anticipated revenue.
Dr. Addison, the governor of the Bank of Ghana, believes that it is still too early to repeal the tax because of several exemptions provided by the E-levy tax law, which may be the cause of the levy’s dismal performance thus far. With time, he believes, the tax will perform better.
“I don’t think it is time to scrap E-levy. Discussions that I have been privy to has been on the level of exemptions granted under the E-levy law. So, I know there is some work which is currently on-going to relook at those exemptions; and hopefully, when that is completed, the levy will bring in more resources than currently,” he told media on Monday, during a press conference to announce the policy rate.
According to a survey carried out by the IMANI Centre for Policy and Education in partnership with the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), about 83 percent of respondents—or eight out of 10—said that their volume of transactions has changed since the E-implementation levy’s in May 2022.
The goal of the study, which involved 1,677 respondents from all around the nation for interviews, was to learn how the E-levy affected Ghanaians and what coping strategies they had used since it was passed in May of this year.
About 47% of those surveyed said they had cut back on mobile money transactions by somewhere between 51% and 100%.
Our research indicates that the government’s official 24 percent attrition rate for the first three to six months after the e-implementation levy’s is likely to be significantly higher.
Given the substantial consumer pushback and consumers discovering alternative ways to conduct financial transactions, these results suggest that the projected GH4.5 billion E-levy income target for 2022 is unlikely to be met, the poll said.