The contentious Electronic Transfer Levy will drop from 1.5 percent to 1 percent in Ghana.
But the GHS 100 daily barrier intended to protect vulnerable individuals will be eliminated as part of the e-levy legislation revision.
Finance Minister, Ken Ofori-Atta made this announcement during the 2023 budget reading in parliament on Thursday (November 24) adding that this review was part of a “seven-point agenda aimed at restoring macroeconomic stability and accelerating our economic transformation.”
The minister admitted that the levy which was introduced in the 2022 budget “has not yielded the resources as expected.” The introduction of the electronic levy was to help the government mobilise domestic revenue.
Mr. Ofori-Atta also noted that the government received several proposals for a review of the E-Levy “and is working closely with all stakeholders to evaluate the impact of the Levy.”
He said these could include the revision of the various exclusions.
“As a first step, however, the headline rate will be reduced to one percent of the transaction value alongside the removal of the daily threshold,” Mr. Ofori-Atta stated.
The government reduced expectations for revenue collection from the levy after an initial projection of GHS 7 billion.
In July 2022, projections were reduced by about ten-fold to GHS 611 million.
Ghana’s electronic levy (e-levy) faces bumpy take-off https://t.co/lgHpp1K2wu
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The levy faced stiff opposition from the Minority in Parliament and was generally unpopular with Ghanaians.
An Afro-Barometer survey showed that three-fourths of Ghanaians disapproved of the e-levy, including 67 percent who “strongly disapproved” of it, local media house, citinewsroom reported.
This review is the second for the levy, after initially being pegged at 1.75 percent before the government reduced it in a compromise amid protests against it.
The levy was eventually implemented in May 2022.