Source: Onuaonline.com
Prof. Lord Mensah, an Economist and Finance lecturer at the University of Ghana Business School (UGBS), has said the scrapping of the Electronic Transfer Levy (E-levy) will not come at a cost to the state.
Although a 2025 Pre-Budget Survey has revealed that the abolition of the E-levy in the 2025 budget will result in a revenue shortfall of approximately GH¢6.4 billion, Prof. Mensah disagrees.
He believes the scrapping of the levy, will in the long run, make the government benefit through “consumption, savings and financial inclusion.”
In his explanation on Ghana Tonight on TV3 Wednesday, April 02, 2025, the Economist averred that aggregate savings was going to increase to enhance other sectors of the economy.
“We are looking at boosting aggregate savings and in the end monies will be available to move to other sectors of the economy,” he stated.
In his analysis on how the state would benefit consumption-wise, he stated that “monies available for electronic transactions are going to increase and that will also enhance people to consume more and through that, there is going to be corresponding increase in production and once production increases, it builds up into profit making.
He noted that further that “by so doing, government gets this deferred e-levy tax from profits that these industries are going to make from increase in consumption.”
According to Prof. Mensah, the scrapping of the E-levy is more of a deferred tax that the state seeks to benefit in future rather than a lost to the economy.
“It’s not a complete lost in the economic space but then it is rather more or less a deferment in taxes that are supposed to be collected and in future government tends to gain from it through increase in consumption and productivity and then also enhancing financial inclusion as far as the electronic space is concerned,” he explained.
His comments follow President Mahama’s assent to some bills, including the Electronic Transfer Levy Act, 2022 (Act 1075) and its Amendment Act, 2025 (Act 1089) on Wednesday, April 02, 2025, that scrapped some nuisance taxes including the betting tax and emissions tax after they were passed by Parliament.
Following the assent, the Ghana Revenue Authority (GRA) officially announced the abolition of the controversial 1% E-levy that was charged on all electronic financial transfers.
With immediate effect from midnight of April 02, 2025, all financial institutions and payment platforms were instructed to cease applying the levy and swiftly process refunds for any deductions made beyond this date.
According to the directive issued by Edward Apenteng Gyamerah, Commissioner of the Domestic Tax Revenue Division, on behalf of the Commissioner-General, all Charging Entities must reconfigure their systems to reflect a “no charge” on transactions.
“The GRA Electronic Transfer Levy Management and Assurance System (ELMAS) will automatically return a ‘no charge’ on all transactions posted to it by entities from midnight,” the directive stated.
Source: www.onuaonline.com
