GRA urges continued support for E-levy amid revenue success

The Ghana Revenue Authority (GRA) has emphasised the importance of sustaining the Electronic Transaction Services Levy (e-levy), citing its significant contribution to the nation’s revenue.

With the e-levy generating GH₵1.19billion in 2023, surpassing its target by GH₵83.15million, the GRA has urged stakeholders to refrain from plans to cancel the levy.

Digital financial services (DFS) taxation, including the e-levy, plays a crucial role in enhancing Ghana’s tax to GDP ratio and expanding the tax net to encompass the informal sector, as highlighted by the state-owned tax collection agency.

GRA’s Deputy Commissioner, Charles Addae, attributed the success of the e-levy to technological advancements such as the integration of charging entities into the Electronic Management System (ELMAS) and efforts to curb tax avoidance.

Addae noted the necessity of maintaining the current revenue stream, cautioning against proposals to cancel the e-levy, particularly amid political discourse. He underscored the importance of increasing the tax to GDP ratio to facilitate national development, urging collective support from all stakeholders.

“There are talks that the tax would be cancelled in the near future, but we are pleading that it’s better we sustain the current generation value raised to cushion the economy. Otherwise, we would be depending too much on loans.

“The idea for e-levy is not how to introduce new tax types but to deepen tax revenue generation in a way that does not affect the already existing businesses that are paying taxes. The tax has been very unpopular as the populace are not seeing the tax to be a good source, but with education and better deployment of technology, we are seeing progress,” he said

Dr. Martin Hearson, Research Director at the International Center for Tax and Development (ICTD), highlighted concerns regarding the regressive nature of the e-levy and the lack of trust in the government among informal workers. While acknowledging the revenue generated, Hearson advocated for a review of the levy to address these concerns.

“There were serious concerns about the fact that if you introduce a tax like this, it affects growth in the mobile money market, but the impact that we saw was only modest and temporary and in the long-run, it seems the growth has continued in spite of the tax,” he said.

Initially introduced in the 2022 Budget Statement and Economic Policy at a rate of 1.75 percent, the e-levy was later revised to 1.5 percent. Despite these adjustments, it generated GH₵1.19billion in 2023, indicating a growing understanding and acceptance of the levy among Ghanaians.

The GRA’s call to sustain the e-levy underscores its significance in revenue generation and economic development, despite calls for its review to address underlying concerns.

This report is based on the proceedings of the ‘Taxing Mobile Money – Lessons and Ways Forward’ conference organised by the International Center for Tax and Development in collaboration with the GRA in Accra.