Government has unveiled plans for a substantial overhaul of the Electronic Transfer Levy as part of its Medium Term Revenue Strategy.
This move signifies a dedicated effort to revamp and optimize this taxation policy for greater efficiency and effectiveness.
In May 2022, the deeply unpopular tax on mobile money transactions, known as the e-levy was introduced.
When it was introduced, the levy was structured as a 1.5% charge on all electronic and mobile money transactions over ¢100 per day.
The e-levy was designed to raise more money for the government by extracting larger tax contributions from Ghana’s informal sector.
In January 2023, the government reduced the rate of the tax from 1.5% to 1%.
The unique feature of the levy, an exemption threshold for transactions below ¢100 a day, is expected to be removed but remains in place for now, although its real value has been eroded by inflation over the past 12 months.
The levy’s effects – on Ghana’s public finances, its poor, mobile money usage – have been at the centre of intense and polarising public conversations, much of it without empirical basis.
This comprehensive redesign of the Electronic Transfer Levy may represent a forward-thinking approach to taxation in the digital age.
It, however, aligns with the government's broader strategy to modernize its revenue collection methods while ensuring that the burden of taxation is distributed equitably across various sectors of the economy.
Other reforms proposed in the medium-term revenue strategy are outlined below:
Firstly, there's a plan to broaden the withholding tax regime, extending its coverage to various tax types, with the aim of bolstering taxpayer identification, facilitating more efficient tax collection, and simplifying filing processes, particularly for incomes within the informal sector.
Secondly, the strategy includes measures to streamline tax returns and scrutinize the modified taxation system, all geared towards reducing tax avoidance and fostering voluntary compliance.
Furthermore, a critical component of the strategy involves a thorough review of outdated tax categories such as stamp duty, income tax stamp, and vehicle income tax, with an emphasis on aligning them with current market dynamics.
Additionally, the strategy looks to enhance the taxation of rental income, ensuring a fairer contribution from this sector.
Lastly, the plan includes the implementation of the taxation on Gross Gaming Revenue (GGR) for industry players and the introduction of withholding tax on winnings, marking a significant step towards a more comprehensive and equitable tax structure.
Latest Stories
-
Elevating Ghana’s creative industry: A blueprint for competing with Nigeria and South Africa
1 hour -
Poor finishing a problem for Asante Kotoko throughout the season – Prosper Ogum
1 hour -
Samini teams up with Francis Osei for ‘Sticks N Locks’ EP
1 hour -
Government should resource record labels – Seven Xavier
2 hours -
I need majority in parliament to successfully complete my term – Akufo-Addo pleads
2 hours -
Next NDC government will not recognise illegal contracts signed by current administration – Sammy Gyamfi
2 hours -
Premier League clubs vote in favour of spending cap plans
2 hours -
Nigeria’s fuel crisis brings businesses to a halt
2 hours -
King Promise impresses fans at sold out show in Singapore
2 hours -
Ejisu by-election to proceed after plaintiff withdraws injunction application
2 hours -
CSOs and NGOs unite to push for priority demands at INC-4
3 hours -
Fuel tanker bursts into flames on Kumasi-Accra highway
3 hours -
EC’s stolen BVR kits, laptops: One granted bail, three still on remand
3 hours -
2 Things: Sista Afia releases first song off her upcoming album
3 hours -
GHS to embark on COVID-19 vaccination campaign starting May 4
3 hours