The Parliament of Ghana has passed the Electronic Transfer Levy Act, 2022 (Act 1075), for the imposition of an electronic transfer levy (e-levy) of 1.5% on electronic transfers. The Act was assented to by the President of Ghana on 31 March 2022 and implemented on 1 May 2022.
The e-levy is a levy on electronic transfers conducted via both mobile money and banking platforms. However, a series of exemptions are granted that exclude certain transfers and transactions.
Among the exempted transactions are specified merchant payments, namely “Transfers made through an electronic payment service (mobile money, bank application, FinTech platform, etc.) to a commercial establishment which is registered with the Ghana Revenue Authority for the purposes of Income Tax or Value Added Tax”. Customers making payments to such specified merchants will NOT be charged the E-Levy.
Through this study, we want to understand better the implications of this exemption in terms of optimal revenue mobilisation and policy design relating to registration, compliance, and the taxation of mobile money. We aim to understand the e-levy exemptions’ impacts on attitudes and perceptions of final users, namely merchants, who might positively appreciate the exemption and accordingly improve their opinions on the tax system more generally. Relatedly, we aim to closely examine the behavioural responses of merchants, in their decision to formalise and, concurrently, to utilise digital payments in their business transactions. We want to observe the impacts of the e-levy exemption analysis qualitative data from focus group discussions, survey data, and administrative data on registrations and tax returns and payment as provided by the Ghana Revenue Authority.