The Minister of Finance, Ken Ofori-Atta, has given the clearest indication yet that the state has no intention of rescinding its decision to introduce the levy on electronic financial transactions (e-levy), citing the application of revenue generated from the levy to areas such as employment creation as crucial.
Nicknamed the MoMo tax, the levy imposes a 1.75% fee on transactions over GH¢100 per day, and has since its announcement during the 2022 budget presentation generated much rancour – with political and business actors describing it as excessive.
However, speaking at a post-budget forum hosted by auditing and advisory firm KPMG, the minister defended the initiative – saying it is imperative in light of increasing digitalisation and its potential to rope the seemingly elusive informal sector into the tax bracket.
Mr. Ofori Atta argued that it is imprudent to have telecommunication companies rake-in more by way of charges from electronic transactions than the state does from taxes on the same.
“With where we are going, even globally, there is no question that the issue of digitalisation as a vehicle to get to everyone is going to be an important factor… I don’t know if it’s right for me as a citizen to allow telcos to take 2 percent and leave them alone, and then accuse the government, which is then going to put those resources to good use in the context of a global crisis. Where do we want to go as a nation?” he queried.
He also called for dispassionate, data-driven discussions on the subject matter, while hinting that the state might be open to modifying some elements of the levy.
“The E-levy is maybe a convenience tax, or maybe a transfer tax because every tax is a tax on tax; where are we going to get the resources? Let us see how we modify this and see what the nation considers important. There needs to be plain honest discussions; spirited, but backed by numbers,” he remarked.
Despite concerns that the directive will erode gains made in the digital economy, analysts – including Nimed Capital’s Joshua Adagbe – who have spoken to the B&FT on the subject suggest that institutionalisation of digital payments through the Ghana.gov platform, the impending e-cedi, Pan-African Payment Settlement System (PAPSS) and the general uptick in electronic payment solutions occasioned by the pandemic, guarantee there will be no wholesale shift in electronic payments.
With entrepreneurship in sharp focus, particularly for young persons as a vehicle to reducing high rates of unemployment and under-employment, concerns have been raised about the suitability of some would-be entrepreneurs to handle capital and associated responsibilities.
Addressing the apprehension, Mr. Ofori-Atta stated that emphasis on entrepreneurship is not limited to owning and operating a business, but also having a cultural reset with regard to business responsibilities. This, he added, is a key component for wider national economic prosperity.
“When we speak of entrepreneurship, we concede that not everyone will end up as an entrepreneur. But we are hoping to see a shift, whereby people come to knowledge of the basics from invoice writing to stocktaking – and they even come to appreciate the value of capital and revenue, among others.”