Everything You Need to Know About E-levy Tax
Electronic transactions have been the norm in Ghana since the introduction of mobile banking by Guaranty Trust Bank Ghana Limited (GT Bank) on the 13th of March 2006.
Alongside this, a merchant payment service was launched by MTN Ghana in January 2017 to increase mobile transactions in markets and drive financial inclusions.
So, without further ado, on the 1st of May 2022, an e-levy tax was set on these merchant payment services due to their convenience and their high patronage in the country. Hence, the tax aims at mobilising revenue, supporting entrepreneurship, increasing Ghana’s tax-to-GDP and many others.
Below is some more information about the e-levy tax.
- What is an e-levy tax?
The E-levy is a tax imposed on electronic transfers charged at the time of transfer. The law is administered by the Ghana Revenue Authority (GRA) and collected through licensed Banks, Specialised Deposit-Taking Institutions, Payment Service Providers (PSPs), and Electronic Money Issuers (EMIs).
- What is the rate or charge of the levy?
The levy is currently a flat 1.50% of the value of the electronic transfer.
- How will the levy be applied?
The levy will be applied on the value (amount) of transfer above GHS 100 on a daily basis. That is, after one hundred Ghana Cedis (GHS 100) a day cumulative transfer, the e-levy will be applied. In other words, if the total amount sent in a day is not more than GHS 100, you will not pay E-levy.
- Who is responsible for charging the E-Levy and how will it be charged?
The entities responsible for charging are All Licensed Banks, Specialized Deposit-taking institutions such as rural and community banks, savings and loan companies, finance houses, etc. Mobile Money Operators (MTN MoMo, Vodafone cash, AirtelTigo Money, Zeepay and G-Money), Payment Service Providers such as E-Tranzact, Ghana.gov, Korba, ExpressPay, etc., The Minister of Finance also has the power to add to the list through Regulations.
- What transactions fall under the E-Levy?
Transfers are done on the same mobile money network – For example, sending money from your MTN Momo wallet to another person’s MTN Momo wallet. Transfers from one mobile money network to a recipient on another network – For example, sending money from your MTN Momo wallet to another person’s Vodafone Cash wallet. Transfers from bank accounts to mobile money accounts: For example, Kofi transfers money from his Fidelity bank account to Ama’s MTN mobile money wallet. Transfers from mobile money account to bank accounts: For example, Esi transfers money from her Vodafone Cash money wallet to Yaw’s Fidelity bank account. Bank transfers (both Intra-Bank and Inter-Bank) on a digital platform or application originate from a bank account belonging to an individual. NB: Daily threshold of GHS 20,000.00 i.e. the tax will only be applied when the cumulative amount in a day exceeds GHS 20,000.00.
Click here to read more on e-levy tax.
Credit= Fidelity Bank