Ranking Member on the Finance Committee of Parliament, Cassiel Ato Forson has described the electronic transaction levy as an inducement to erase the cashless system the government has created.

The Ajumako-Enyan Esiam MP in an interview on Top Story on JoyFM noted that the newly introduced levy will push away Ghanaians from engaging in digital transactions.

According to him, the new tax introduced distorts government's whole idea of digitalization.

“This budget is going to erase the cashless economy that we are talking about. People are now going to keep their monies at home, people are now going to carry monies at the back of their cars, people are now going to trade with physical cash because any transaction you engaged in with the bank you are going to pay transfer tax…today, we are confronted with a situation that the very thing that we are doing to actually help cashless economy, today we are erasing all of that,” he explained.

Dr. Ato Forson added that the new levy if approved by Parliament will cause a great deal of disruption in the country’s economy.

“...to the extent that businesses are going to suffer…the companies deal with transfers and the transfers will certainly increase their cost of doing businesses because now every transfer the company does they are going to pay 1.75% including the wages and salaries of employers. The company then will introduce the cost to the client and it goes on and on and it is going to distort the economy,” he said.

Responding to a question on what could have been done rather than introducing the E-Levy, he argued that government must reduce its expenditure.

“If not on E-transaction, cut expenditure,” he said.

The Finance Minister, Ken Ofori-Atta on Wednesday announced the introduction of Electronic Transaction Levy or E-Levy to increase tax revenues for the country.

The levy is pegged at a rate of 1.75% on all electronic transactions covering mobile money payments, bank transfers, merchant payments, and remittances, which shall be borne by the sender except inward remittances, which will be borne by the recipient.

He said this will help the government to shore up revenue inflows to fund road projects in the country since the government has scrapped payment of road tolls by motorists who ply tolled roads across the country.