Panic withdrawal in response to passage of E-levy: are we simply not willing to pay tax or the rate is high?

There has been panic withdrawal (cash out) following the passage of the controversial e-levy. This panic withdrawal has been acknowledged by the Ghana Chamber of Telecommunication and the Mobile Money Agents Association of Ghana. Dr. Kenneth Ashigbey, the chief executive of the telecommunication chamber, has called on the government to devise a measure to disincentivise Ghanaians from cashing out of their

Read full articlemobile money wallets. He noted that if the volume of electronic transactions continues to fall in droves, as has been observed, the E-levy's purpose will be defeated.

The General Secretary of the Mobile Money Agents Association, Evans Otumfour, also indicated that his association will intensify education on the issues. He noted that the panic withdrawals are a result of low education.

The bottom line is that there are panic withdrawals or cash outs. What is the cause of these panic withdrawals?

Is it the case that we simply do not want to pay tax, or do we feel the rate is high?

The answers differ and depend on who you are speaking with. We all know that no nation can develop without taxes. This is not the first tax as far as phone transactions are concerned. Remember the communication tax and what greeted its introduction? As rational human beings, we respond to situations differently, but we eventually land at the same point. The government itself, through the communication minister, made us understand that transaction volumes would be reduced for some time and picked up later. We also have examples from other African countries where the introduction of such levies has resulted in a drastic reduction in transactions.

Our economy is a cash economy and was only picking up on the cashless side when this levy came. No matter the reason for the panic withdrawal, we hope the transactions will pick up soon.

However, the issue of the rate cannot be overlooked. Many, including the telecommunication chamber themselves, think the rate can still be looked at. Mr. Ken Ashigbey, who spoke to Joy News, called on the government to discourage Ghanaians from cashing out of their electronic wallets by revising the E-levy law.

We wait to see if there will be improvements in electronic transactions or if the status quo will remain. Some have, however, indicated that they are willing to carry cash despite the risk. Those who use bank transfers have also indicated that they are willing to go and queue at the banks to do their transfers. This is understandable given the economic difficulties we have witnessed in the last few months.