An empirical study on the impact of the controversial electronic transfer levy (e-levy) on electronic transfers conducted by IMANI Ghana, indicates e-levy has impacted the government’s cash-lite society agenda negatively.
The study, done 45 days after the e-levy implementation, was to obtain the perspectives of Ghanaians on the introduction of the e-Levy, ascertain its impact on the use of digital financial services in Ghana and the coping strategies used by Ghanaians in using digital financial services after the implementation of the e-Levy.
It reveals close to 43.8% of Ghanaians have reverted to using cash for transactions, which is a hard hit on government’s cash-lite economy and financial inclusion agenda.
This was something that Vice President Dr. Mahamudu Bawumia, the champion of Ghana’s digital transformation agenda, warned against taxing mobile money transfers in particular, but his colleagues in government did not heed his warning and went ahead with the e-levy.
The study also showed that a significant 69% of the Ghanaians, when undertaking digital transactions, spread the amounts across days and make small payments of less than GHS 100 per day, in order to escape the e-Levy charge.
Again, another 20.7% of the Ghanaians are exploring loopholes in the implementation of the levy by collaborating with mobile money vendors, while a further 18.1% of the population are using mainstream banks to undertake transactions all in the bid to avoid the E-Levy charge.
Presenting the findings of the study, King Carl Duho, a research consultant with IMANI Ghana, noted that the volume of digital transactions had reduced by some 83% since the introduction and subsequent implementation of the levy – this is evidenced by the GHS10 billion drop in mobile money value reported by the Bank of Ghana.
He asserted that the actual attrition rate for digital transactions, following the implementation of the e-Levy is likely to be higher than the 24% projected by the government, adding that government is unlikely to meet its revised revenue target of GHS4.5 billion from the e-Levy.