Country Senior Partner at PwC Ghana Vish Ashiagbor has urged government to provide more details to explain how the Electronic Transactions Levy (E-Levy) will be implemented.
The Finance Minister, Ken Ofori-Atta during the 2022 national budget presentation in parliament on Wednesday, November 17, 2021, announced a 1.75 percent levy on all electronic transactions, including Mobile Money and remittances.
The new policy, which is yet to be implemented has received mixed reactions from bankers, tax analysts, fintechs and ordinary traders—with some describing the levy as regressive since it may lead to multiple taxation.
Speaking to the B&FT ahead of a PwC 2022 Budget Digest discussion today, Mr. Ashiagbor said there is the need for further engagements and dialogue to explain the remit of the tax.
According to him, there are concerns among stakeholders in the financial sector whether the levy amounts to double taxation, due to its broad application on all electronic transactions. “The initial reading of the budget suggested that the levy applies quite broadly to a large number of electronic transactions including remittances. How that will be implemented is what we need to understand.”
He added that some financial analysts and observers are seeking further explanation on how the levy will be implemented on bank transactions. “For example, in the banking sector what kind of transactions are affected and where and how will it be applied? If an employer pays salary, does it affect that transaction? If the money is moved from bank A to bank B, will the levy also affect that salary? I think we need clarity on that,” he appealed.
Describing the levy as a surprise to many in the financial sector, Mr. Ashiagbor maintained that providing better and further particulars will aid banks, telcos, and fintechs to reconfigure their system to help in the implementation of the new policy.
2022 budget ambitious
Mr. Ashiagbor lauded the various initiatives outlined in the budget to boost government’s revenue collection, stating that the decision to widen the tax net is a proactive move that will help government mobilise funds to embark on economic development.
“This budget is ambitious and rightly so. In terms of the amount of revenue that government is looking to generate; it is good to bring the fiscal indicators into a healthier position. We believe that where country’s finances have reached now requires us to take bold and aggressive moves.”
About the PwC 2022 Budget Digest
The PwC 2022 Budget Digest will start this morning (Tuesday, 23 November 2021) at 9am. The event will be held through virtual platforms and will be streamed live on Facebook @PwCGhana and on YouTube @PwCAfrica. The expert panellists together with policy makers will provide insights on the Budget Statement and Economic Policy and afford an audience the opportunity to ask questions and provide feedback.
The panel will include Finance Minister, Ken Ofori-Atta; Chief Operating Officer of the Ghana Investment Promotion Centre, Nana Dufie Addo; and Chief Executive Officer of the Ghana Association of Bankers, John Awuah. Also on the panel are Executive Director UK-Ghana Chamber of Commerce Adjoba Kyiamah; and Tax Leader, PwC Ghana Ayesha Bedwei .