Business News of Tuesday, 29 March 2022
Source: www.ghanaweb.live
2022-03-29FLASHBACK: Here are some businesses that will be affected by E-Levy
E-Levy bill passed
The controversial E-Levy bill has been passed by parliament after going through various amendments. The 1.75% levy has been reviewed to 1.5%.
Meanwhile, Finance Minister, Ken Ofori-Atta, listed transactions that will be affected by the E-Levy and those that will be exempted.
Government intends to use the money accrued from e-levy to create jobs and
Read full articlegrow the private sector to employ more of the teeming unemployed youth in the country.
The revenue generated will also accelerate the government’s digitalization agenda, enhance the security of Ghanaians on digital platforms, aggressively expand the country’s road infrastructure agenda, reduce dependence on debt and reduce the crowding out of the private sector to improve access to credit.
Ken Ofori-Atta made this known at a press conference in Accra on Wednesday, January 19, 2022.
E-Levy will cover the following:
Mobile Money Transfers between accounts on the same electronic money issuer (EMI).
Mobile Money transfers from an account on one EMI to a recipient on another EMI.
Transfers from bank accounts to mobile money accounts.
Transfer from mobile money accounts to bank accounts.
Bank transfers on a digital platform or application originate from a bank account belonging to an individual to another individual.
E-Levy will not impact
Cumulative transfers of GH¢100 per day made by the same person.
Transfers between accounts owned by the same person.
Transfers for the payment of taxes, fees, and charges on the Ghana.gov platform.
Electronic clearing of cheques.
Specified merchant payments (i.e. payments to commercial establishments registered with GRA for Income Tax and VAT purposes).
Transfers between principal, master-agent, and agent’s accounts.
Read the full story originally published on November 19, 2021 by GhanaWeb
The Electronic Tax or E-Levy of 1.75% covers almost every online transaction including mobile money transfers, purchasing food and other items, and inward remittances.
These are some of the businesses that may be affected directly or indirectly by the e-levy
Mobile money platforms:
The mobile money platform has become one of the easiest, fastest ways of circulating money for businesses or as a token to loved ones. The introduction of this initiative is relatively cheaper compared to the stress of going to the bank and joining long queues. With Momo, any individual can transfer money within the comfort of his home or shop. However, the introduction of the 1.75% levy as announced by the Finance Minister is likely to take a toll on both operators and users as charges will increase once it's implemented.
Online stores:
After the outbreak of COVID-19, transacting business online has become very rampant and the first choice for most people. For some, it is convenient and easy to use as they may not have to go to physical shops to buy their items. Now, with the introduction of the e-levy, customers who depend heavily on online shops will have to pay more for purchases they make.
Courier services:
Courier services will not be left out as they have become the go-to model for the picking-up or delivery of items bought online. For safety and efficiency, most riders transact via mobile money. A tax imposition on mobile money directly affects the activities of these riders which may cause an upward adjustment in their prices thus affecting patrons of their services.
Ride-hailing services:
Ride-hailing services have seen a substantial increase in patrons in recent times. Due to the numerous challenges, ranging from long queues to inconvenience with public transport systems, ride-hailing has become the answer to easy and fast commuting for most Ghanaians. These services are mainly done online thus will not be left out of the imposition of the 1.75% levy.
Food Apps:
Just like buying clothes, jewelry, shoes, accessories, etc online, most restaurants have adopted online platforms to interact with customers and help them make purchases. Most payments for these services are done through mobile money and other online payment platforms. These apps will not be left out of the electronic tax that will be rolled out in January 2022.
Online banking:
Banks have created apps and online platforms to reduce in-person interactions with customers. Customers can perform almost all banking transactions with just a click of a button in their offices or the comfort of their homes. These services are also relatively cheaper and convenient to operate, but the story may be quite different when the new e-levy is imposed.
This list is not exhaustive as the levy appears to largely affect almost all online transactions.
The government intends to widen the tax net and rope in the informal sector to generate revenue as online transactions have seen appreciable growth over the past few years.
