The Ghanaian government’s proposal to introduce a 1.75% levy on digital transactions was recently rejected by a minority of lawmakers who insist the new tax derails efforts to help increase the number of adults that are financially included.
Digital Transactions Tax
The government’s proposal to impose a 1.75 % levy on all digital transactions, including those made via mobile money payments, was rejected by a minority of Ghanaian lawmakers. The lawmakers argued such a levy would slow down the country’s plan to increase the proportion of financially included adults from 58% to 75% by 2023.
According to reports, the proposed tax, introduced in Parliament by Ken Ofori-Atta (Finance Minister) was supposed to go into effect on February 20, 2022. The Ghanaian government argues that the proposed levy would help reduce the country’s deficit from an estimated 12.1% of gross domestic product this year to 7.4% in 2022.
However, the minority lawmakers in Ghana’s hung parliament insist the levy will work against efforts to increase the number of adults that are financially included. The report claims that these legislators have refused to meet Ofori Ata. He is trying to get them to agree to his proposal.
Meanwhile, following what the report called “heated proceedings,” lawmakers from the majority block walked out and this led to the adjournment of the debate to November 30. The report also said the refusal by the minority lawmakers to support the levy has frustrated lawmakers that back Ofori-Atta’s proposal.
The report quotes Majority Leader Osei Kyei-Mensah Bonsu, questioning the lawmakers’ refusal to support the levy. He asked:
The budget’s cornerstone is the elevy. We need to know where we are going to find the money for the roads.
Ghana’s mobile money platforms whose transactions surged 82% to $91.9 billion in 2020 are now an indispensable part of the country’s payments infrastructure. In addition to making payments, the platforms are also used to access loans and to pay insurance premiums by Ghana’s unbanked population.
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