A research study conducted by the Institute of Statistical, Social and Economic Research (ISSER) has revealed that approximately one million mobile money accounts became inactive following the implementation of the Electronic Transfer Levy (E-levy) in May 2022.
This resulted in a decline in the total number of accounts, reducing from 19.1 million to 18.1 million by July 2022.
According to ISSER’s review, the number of registered and active accounts and agents continued to rise in January 2023, although the number of active accounts dropped by 100,000 in February 2023.
Between March and April 2022, there was a decrease of 10 million in the total number of transactions, and the total value dropped by GH¢2.8 billion. Likewise, between April 2022 and May 2022, the total number of transactions fell by 21 million, and the total value decreased by GH¢16.3 billion.
During June 2022, there was a reduction in the total number of transactions, followed by a period of recovery between July 2022 and November 2022. Ghanaians quickly turned to alternative payment systems when the E-levy was introduced.
Furthermore, ISSER reported that initially, less than 7% of the target revenue was realized, with only ¢93 million out of GH¢1.4 billion raised. Interestingly, upon the announcement of the E-levy, there was an increase in the usage of alternate payment systems, such as GHIPPS instant pay, cheques cleared, and internet banking.
After the E-levy rate was adjusted to 1%, ISSER noted a drop in the usage of alternate payment systems. However, these figures increased again in February 2023, indicating that the effect of the revision was short-lived.
In conclusion, ISSER observed that the E-levy failed to generate the expected revenue. Furthermore, it emphasized the significance of the tax rate, suggesting that even marginal reductions (e.g., 0.5%) could influence the acceptance or rejection of a tax policy by stakeholders.