The Electronic Transfer Levy (E-Levy) accrued GH₵861.47m in 11 months of implementation, which is just a little over half of the GHS1.46 billion it was expected to generate in the first two months.
E-levy is a 1% tax on all electronic money transfers apart from those excluded by law.
The Levy is charged to the wallet from which the transfer is made, but not on the recipient wallet.
It was introduced to enhance domestic tax mobilization, expand the tax base and provide an opportunity for everyone to contribute towards national development.
At the time of the introduction of e-levy, government told Ghanaians that expected revenue from the levy will be enough to revive the ailing Ghanaian economy and prevent the country from going to the IMF for a bailout.
The government also said it expected e-levy to yield at least GHS1.46 billion in just the first two months of implementation, but eleven months on and the levy is yet to realize it first one billion cedis.
GH₵614.57m in 2022
The levy which took effect on May 1, 2022 yielded GH₵614.57 million in first eight months of 2022, less that half of the first two months target.
GH₵246.9m between January and March 2023
For the first three months of 2023, E-levy raked in GH₵246.9 million.
The significant shortfalls in the expected revenue from e-levy is largely because Ghanaians adopted legitimate coping strategies to avoid paying e-levy due to the harsh economic conditions citizens find themselves in.
The breakdown
Data from the Ghana Revenue Authority (GRA) shows that in its first month of implementation, which May 2022, e-levy generated GH₵53.58 million.
June – GH₵59.23
In June 2022 which is the second month of implementation, inflows went up to GH₵59.23 million, an increase of 10.54% compared to May inflows.
July – GH₵65.70m
In respect of July 2022, E-levy recorded another increase of 10.92% raking in GH₵65.70 million.
August – GH₵71.29m
Again, the inflows from the levy chalked 8.51% increase over the previous month hitting GH₵71.29 million for the month of August 2022.
September – GH₵78.95m
For September 2022, the trend continued as the GH₵78.95 million revenue recorded represents 10.74% increase over the amount for August.
October – GH₵85.73m
October 2022 E-levy inflows rose to GH₵85.73 million, an increase of 8.59% over September inflows.
November – GH₵93.3m
In November 2022, revenue from E-levy again rose by 8.83% to GH₵93.3 million.
December – GH₵106.79m
E-levy ended the year 2022 on a high note raking in GH₵106.79 million in December which represents 14.46% over the November inflows.
January – GH₵85.93m
Following a review of the E-levy rate from 1.5% to 1%, inflows recorded significant 19.53% decline to rake in GH₵85.93 million in January 2023.
February – GH₵73.99
February 2023 recorded further decline of inflows to GH₵73.99 million, representing 13.9% drop compared to the January 2023 figure.
March – GH₵86.98m
However, in March 2023, E-levy amounted to GH₵86.98 million, an increase of 17.56% compared to February 2023 inflows.
E-levy rate
The Electronic Transfer Levy Act, 2022 (Act 1075) was controversially passed in March 2022 and imposes a levy of 1.5% on electronic transfers.
The 1.5% rate was a downward revision from the initially proposed 1.75% and GH₵100 daily free transfer.
However, when the rate was again reviewed in the 2023 budget to 1%, the daily GH₵100 daily free transfer has also been scrapped.
Transactions E-Levy covers
- Mobile money transfers between accounts on the same electronic money issuer (EMI)
- Mobile money transfers from an account on one EMI to a recipient on another EMI
- Transfers from bank accounts to mobile money accounts
- Transfer from mobile money accounts to bank accounts
- Bank transfers on a digital platform or application which originate from a bank account belonging to an individual to another individual
Transactions E-Levy does not cover
- Transfers between accounts owned by the same person
- Transfers for the payment of taxes, fees and charges on the Ghana.gov platform
- Electronic clearing of cheques
- Specified merchant payments (that is, payments to commercial establishments registered with the GRA for income tax and VAT purposes)
- Transfers between principal, master agent and agent’s accounts
