Prof. Peter Quartey, Director of the Institute of Statistical, Social, and Economic Research at the University of Ghana, is concerned that the 1.5 percent rate of the Electronic Transfer Levy (E-Levy) will prevent the government from meeting the levy’s GHC 6.9 billion target.
The E-levy Bill was signed into law by President Nana Akufo-Addo two days after it was passed by parliament.
The president’s action came just a day after the Minority in Parliament filed a suit in the Supreme Court to challenge the levy’s passage, claiming that parliament lacked the necessary numbers.
Critics of the proposal have warned that this new levy will negatively impact the Fintech space, as well as hurt low-income people and those outside the formal banking sector.
Speaking to Citi Business news on the impact of the levy, the Director of the Institute of Statistical, Social and Economic Research, of the University of Ghana, Prof. Peter Quartey warned that the levy’s high rate could see people substituting electronic transactions with cash transactions.
“If you look at consumers or users of electronic transaction systems, the E-Levy charge is going to add to their cost of doing business, it’s going to affect people’s incomes or expenditures, and therefore that may have some repercussions. As to whether government will be able to realize the GHC 6.9 billion from the current rate, I’m yet to ascertain. But I am not convinced the rate will help government in bringing in all the targeted revenue.”
“I still believe that a lower rate would have ensured that almost everybody will continue using the service. A higher rate might make people want to substitute. Some would rather use cash while others use other forms of payment,” he added.
