Dr Ken Ashigbey, the Chief Executive Officer of the Ghana Telecommunications Chamber, has called on the governmemt to reduce the electronic transactions levy (E-levy) from 1.5% to 0.1%.
He indicated that the introduction of the e-levy at 1.5% has proven worthless to both the government and the development of Ghana’s economy.
Speaking in an interview, Dr Ashigbe explained that while calling for a total scrap of the tax measure would be insensitive considering the government’s dire need for money amidst an economic turmoil, reducing it to 0.1% would recondition the digital economy, thus generating more revenue for government.
“Our proposition is the fact that, you know, they should scrap it. But we need to be real, government needs money at this particular stage. The deficit position is not good for the industry. It affects the industry, it’s one of the things that would account for the depreciation of the cedi.
“So we think that the best thing to do is to reduce the level. Some in the industry have talked about 0.5, but I have said that the best thing to do is to do 0.1.”
Dr. Ken Ashigbe
He further stated that while the government reduces the rate, it should also place a cap on it. To him, the current cap-less system makes it most undesirable to transact business with large sums of money via digital platforms.
Dr.Ashigbey opined that transactions that are 5,000 cedis and above should only attract a fixed e-levy rate to attract more large transactions on mobile money platforms. “You know, push the level down to 0.1 and then put a cap on it. Say 5,000 cedis. At 5,000 cedis the levy is fixed so that if anybody wants to send 10,000 cedis, you know, that will happen”, he said.
He called on the government to place a cap on the amount of cash that can be used in a transaction. According to him, when physical transactions are capped at 2,000 cedis for instance, people will be forced to transact business via mobile money platforms for large transactions.
“Another innovative thing that we would say is that put a cap on any transaction that can be done by cash, so let’s say 2,000 cedis. If you want to do any transaction above 2,000 cedis use a digital means for mobile money, for the banks and all of that.”
Dr Ken Ashigbe
Call For Review Of E-levy
Meanwhile, Dr. Ashigbey, has called for a review of the government’s electronic levy (E-levy). According to him, the government erred when it decided to tax the digital platforms rather than taxing the digital economy.
He stated that the taxing of mobile money platforms such as mobile money wallets as well as fintech platforms has significantly contributed to the stunting growth of Ghana’s digital economy.
The CEO disclosed that more and more Ghanaians are now refusing to transact business digitally as against the years prior to the introduction of the e-levy when the digital economy was experiencing a boom.
This he says has driven away investments from Ghana’s fintech space and could possibly lead to a collapse of the industry should revenue continue to drop as fast as they are now especially taking into consideration the current economic woes.
“Now the attitude of a lot of Ghanaians is that even if you want to pay them with mobile money; my workers, even if you want to pay them with mobile money, they don’t want to take it. Because once the money goes onto the wallet, it means they’ll pay the taxes.”
Dr Ashigbe
Dr. Ashigbey noted that while players in the digital economy continue to experience a downward trajectory in their revenue, the government will also fail in accruing the projected taxes it hopes to collect through the e-levy.
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