GRA’s weak assumptions and sloppiness in E-Levy implementation


It would appear that the Ghana Revenue Authority (GRA) working on the orders of the finance minister/ministry, on behalf of President Nana Addo Dankwa Akufo-Addo was bent on visiting frustration on Ghanaians by choosing very significant days to implement the obnoxious electronic transfer levy (e-levy). 

The first phase of e-levy was implemented on May Day (May 1), a day set aside to give hard-working Ghanaians a break from their stress and to celebrate them for their contribution to national development. Nothing could be more ironic than GRA choosing such a day to inflict e-levy on Ghanaians, with all of its anomalies as reflected in wrong deductions.

Then, after e-levy has failed to deliver on the over-ambitious GHS600 million target in two months, GRA again chose no less a day than Ghana’s Republic Day, July 1 to implement the second phase – again, full of wrongful deductions. Republic Day is supposed to be the day on which our independence is truly consolidated with a self-determined constitutional rule. That was the day GRA chose to deny us the independence of spending our digital money the way we wanted. They took money from us which they should not have taken, and promised to refund it in their own time.

Moving away from that, it would appear that GRA has also been deliberate with its weak assumptions and sloppiness in aspects of the e-levy implementation, and that is reflected in how the e-levy has played out so far.

Weak Assumptions

In phase one, GRA and indeed, the government assumed that Ghanaians have become so ADDICTED to the use of  Covid-driven digital transactions such that they will not have any choice than to keep using mobile money and other digital wallets for transactions in spite of the e-levy – and that will eventually give the government a minimum of GHS600 million from e-levy within just two months. In fact, after rolling out phase one, GRA was quick to put out the information that a single e-levy charging entity (most likely MTN) was able to collect over GHS1 million a day, so they were hopeful that the target will be met.

Fast forwards, two months passed and they could report an abysmal GHS60 million from e-levy. That is just a paltry 10% of what they over-confidently projected.

It is not as though one is happy that the tax collector’s effort to collect taxes for national development has failed. But all the signs were on the wall and many stakeholders, including industry players, civil society, individual experts, Parliamentarians and the general public did warn that the e-levy was not going to deliver on those unrealistic targets. Ghanaians cried out so loudly against e-levy but the government that promised to be a listening one failed to listen.

Top government actors like the Ministers of Finance, Communications, Information and some leading government Parliamentarians chose to go on a fanciful national tour whipping up support for the e-levy and, in some cases, engaging in untruths and half truths about what is happening elsewhere regarding digital taxes, just to make it look like Ghana’s e-levy, in its current shape and form, is not new and is not the worst tax burden compared to others.

To cut a long story short, their weak assumptions and propaganda failed because Ghanaians adopted coping strategies to avoid the e-levy. The simple truth is that times are hard, not only for the government but even more for the people from whom the government has chosen to inflict the obnoxious e-levy. So, people straight away, switched to coping mode and have since done and continue to do any and everything legitimate and otherwise to avoid and evade e-levy. That is what has led to the abysmal performance of the tax.

E-levy as tax compliance tool  

As if that was not enough, in implementing phase two of the e-levy, GRA is still assuming that they can compel Ghanaians to stop buying from some merchants by unfairly inflicting e-levy on them.

The strategy here is that, because e-levy itself has failed to deliver, GRA is now trying to use it as a tax compliance tool, to whip various merchants into registering with the GRA to pay value-added tax (VAT) and income tax. Truth be told, several merchants, particularly those online, are not registered with the GRA to pay VAT and income tax. So, ordinarily, any strategy to get them to register is a good one.

But in an attempt to leverage e-levy to drive tax compliance among merchants, GRA has decided that they will punish innocent Ghanaians who buy from such merchants and pay electronically. The idea is two fold:

  1. Discourage Ghanaians from transacting business with or buying from merchants who are not registered with GRA to pay taxes
  2. Compel the defaulting merchants to go and register with GRA so that their customers will be free from the e-levy.

The assumption here is that Ghanaians will necessarily quit buying from such merchants and those merchants will necessarily rush and go register with GRA and start paying VAT and income tax. Well, we are yet to see the numbers and know for a fact, if indeed the strategy is delivering as expected.

But in making that assumption, GRA is completely ignoring other very important possibilities:

  1. The consumers can choose to stay with same merchants and use CASH instead of electronic payments.
  2. The merchants can decide to use particular mobile money vendors to receive money on their behalf, or can actually direct customers to nearby mobile money vendors or ATMs to cash out and pay with cash.

It is worrying how GRA is only sticking with a one-sided assumption without considering the other choices the consumer has. And given the fact that Ghanaians are generally in coping mode to avoid e-levy, it is rather smarter to assume that people are more likely to resort to cash usage instead of abandoning their favourite merchant just to please GRA.

By the way, why is GRA not implementing a special regime of e-levy on merchants who refuse to register for VAT and Income Tax. For whatever money transferred to such merchant wallets, GRA should ask the charging agency to apply a surcharge probably even higher than e-levy on the merchant’s wallet, so that the innocent consumers will be free from this unnecessary infliction of e-levy. So, if I send GHS100 to a merchant, the merchant receives only GHS98.5, but my wallet is debited GHS100. This is not rocket science.

On the other hand, I would advise that GRA intensifies its other tax compliance strategies instead of trying to leverage the obnoxious e-levy to drive tax compliance.

Deliberate Sloppiness

But the weak assumptions are not as worrying as deliberate sloppiness when it comes to the aspects of the e-levy that benefits the public vis-à-vis the efficiency in implementing aspects that benefit GRA.

In phase one, GHS100 transfer in a day per wallet was exempted from e-levy. So, if you had, let’s say, five mobile wallets and five bank accounts, and in a day you make GHS100 transfer from each of them, you were exempted from e-levy for all the ten transfers. So, you get to enjoy the exemption ten times. This was because the GRA’s Common Platform, which verifies the owner of the ten wallets and bank accounts was not yet ready, so GRA treated all the transfers separately and therefore applied the exemptions to each of them.

In phase two, the Common Platform is ready so all your five wallets and five bank accounts are now linked to your Ghana Card. So, if you do the first GHS100 transfer and you enjoy the exemption, the system takes account of the fact that your Ghana Card has enjoyed exemption on a GHS100 transfer from one wallet or account. So, any other transfer you do from any other wallet or account linked to that same Ghana Card will not enjoy any further exemptions for that day.

GRA has been particularly efficient in ensuring that no one enjoys more than one exemption on GHS100 transfer per day, no matter the number of wallets/accounts the person has. Indeed, that is commendable and an obvious proof that GRA and its partners in the design and rollout of the Common Platform can be very efficient if they want to.

This is why it is particularly worrying that when it comes correcting the wrong charges on the Ghanaian, GRA and its partners metamorphose into some sloppiness people who do not know what they are about. It looks very deliberate in the sense that prior to implementing phase two, they bent over backwards to ensure that the multiple daily exemptions on GHS100 is corrected, but with the exemptions on transfers between wallets and accounts belonging to the same person, it has been problematic since phase one. We were told that once phase two is rolled out that anomaly will go away, but it never did. In fact it became even worse.

During phase one, GHS100 or less transfers in a day attracted e-levy and GRA promised refunds by the charging entities. Whether all of those refunds were executed or not we don’t even know. But I can at least tell my own story.

True Stories 

On June 2, 2022, I transferred GHS500 from my MTN mobile wallet to by SG Bank Account. I was charged GHS7.50 e-levy. I called GRA and I was asked to call MTN. I called MTN and they asked me to call my bank. I called my bank and they promised to get back to me. Till date, they have not gotten back to me on why they have failed to refund the wrongfully charged GHS7.50 e-levy that GRA promised will be refunded.

This happened under phase one and I am yet to get a refund. Under phase two, we were told this kind of thing will not even happen in the first place because the almighty Common Platform is here and it will verify all transfers and exempt those between wallets and accounts belonging to same person. But that is also not true.

Daniel Victor Nartey is a customer of GTBank and MTN. He transferred GHS300 from his GTBank account to his mobile wallet on two occasions after July 1, and he was charged GHS3 e-levy on both occasions. Again, the story is that it will be refunded, but as to whether it will indeed be refunded, one cannot tell.

But the main issue is that how come GRA and its partners were very efficient in dealing with the multiple exemptions on the daily GHS100 transfers but are so sloppy on the same-owner wallets and accounts transfers?

That is a question begging for answers.

Surprising Fees

The other ugly thing that happened was that in the rollout of phase two, even the telcos, particularly MTN started charging 1% transfer fees for the first GHS100, even though it was supposed to be zero fees. And even if there was supposed to have been a fee, it was supposed to be 0.75% and not 1%, but for some reason it reverted to 1% and we were promised refunds. Again, I was a victim on two occasions and we were promised refunds. I have still not had any notification indicating I got a refund from MTN.

We are still watching to see what will become of this obnoxious e-levy that was implemented through one of the most questionable means in the history of our country. I have not hidden my dislike for the e-levy, and everything that has happened so far confirms my qualms about the e-levy. I am not alone – even the Vice President of this country and champion of our digital transformation, Dr. Mahamudu Bawumia, made his divergent position on e-levy known long before the implementation. It is therefore not a surprise that he voice is conspicuously missing in this whole e-levy propaganda by his colleagues in government.

The truth is very simple – e-levy does not make sense and will never make sense.

We leave it here.


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