Reducing the percentage of the electronic transaction (e) levy charged on Ghanaians from 1.5% to 0.5% would increase revenues by almost a quarter, a researcher has revealed.
The research, conducted by the Centre for Economics Finance and Inequality Studies (CEFIS), found that Ghanaians are finding creative ways to avoid paying the e-levy.
The result is a stunning loss of revenue to government which is rather entering the pockets of Mobile Money Merchants.
MoMo merchants have been making arrangements with customers to circumvent the e-levy, with some admitting to the Ghana News Agency on condition of anonymity.
The merchants said some people deposit money to recipients through them to avoid the payment of the E-levy, while others allowed cash-out from their end instead of transferring the money to the recipients directly and paying the corresponding tax.
CEFIS observed that “in many commercial transactions, the parties involved negotiate based on a ‘gentleman’s agreement’, where the sender deposites cash into the wallet of the receiver through a MoMo merchant account to avoid the payment of its corresponding e-levy charge.”
Prof Anthony Amoah, a co-author of the study, who spoke to GNA, said: “We observed that consumers have created a gateway to avoid the tax, giving that tax avoidance is not criminal.”
He said that the strategy of using the e-levy as a conduit to get the informal sector to contribute to national revenue had failed, as the informal sector, the most active group, was exploiting the loopholes.
“Those who do transactions like GHS50 and GHS100 are already exempted from paying the tax but those who pay above the cumulative GHS100 are avoiding it and it’s actually those who are doing bigger transactions that do it more,” he said.
Prof Amoah added that: “This means that it is the agent that benefits and not the Government, and we found that the number of agents is going up because it’s more profitable to be in that business, but it is very discouraging to the Government.”
“If the Government reduces the rate from the 1.5 per cent to 0.5 per cent and people don’t feel the impact, then you’re going to rake them in,” Prof Amoah, who is a Development Economist, said.
The evidence from the simulations suggested that if the levy was revised to 0.5 per cent, and 54 per cent of the existing active users patronised MoMo transactions, the expected revenue for 2022 would be GHS2,640,600,000.81.
That revenue would rise by 21.4 per cent to yield GHS3,205,688,401.01 in 2023, and in 2024, reach GHS3,635,234,306.60, and by 2025, the projected revenue from e-levy would reach GHS4,043,980,051.74.
Source: theGhanaianVoice.Com