The Chief Executive Officer of the Ghana Telecommunications Chamber, Dr. Ken Ashigbey, has called for the reduction of the electronic transactions levy (E-levy) from 1.5% to 0.1%.
According to him, the introduction of the e-levy at 1.5% has proven counterproductive to both the government and the development of Ghana’s digital economy.
He explained that while calling for a total scrap of the tax measure would be insensitive considering the government’s dire need for money amidst an economic turmoil, reducing it to 0.1% would revamp the digital economy thus generating more revenue for government.
Speaking on JoyNews’ PM Express Business Edition, he said, “Our proposition is the fact that, you know, they should scrap it. But we need to be real, government needs money at this particular stage. The deficit position is not good for industry, it affects industry, it’s one of the things that would account for the depreciation of the cedi. The macros would be destabilized.
So we think that the best thing to do is to reduce the level. Some in the industry have talked about 0.5, but I have said that the best thing to do is to do 0.1.”
He added that while the government reduces the rate, they should also place a cap on it.
Dr. Ken Ashigbey suggested that transactions that are 5,000 cedis and above should only attract a fixed e-levy rate to attract more large transactions on mobile money platforms.
According to him, the current cap-less system makes it most undesirable to transact business with large sums of money via digital platforms.
“You know, push the level down to 0.1 and then put a cap on it. Say 5,000 cedis. At 5,000 cedis the levy is fixed so that if anybody wants to send 10,000 cedis, you know, that will happen,” he said.
“Take out the discrimination between the 20,000 that you give to the banks and then you give to mobile money so that the discrimination is not based on that,” he added
On the other hand, Dr. Ashigbey is calling on the government to place a cap on the amount of cash that can be used in a transaction.
According to him, when physical transactions are capped at 2,000 cedis for instance, people will be forced to transact business via mobile money platforms for large transactions.
“Another innovative thing that we would say is that put a cap on any transaction that can be done by cash, so let’s say 2,000 cedis. If you want to do any transaction above 2,000 cedis use a digital means for mobile money, for the banks and all of that.
“What will happen is that a lot of the things that happen underground… a lot of that you’ll be able to take them off and then you’ll be able to see a lot of movement in terms of cash and that also will help,” he said.
“And then in terms of government payments, make sure that all government payments mandatorily are made simple and let people be able to pay so that tolls that people pay in the market and all that will use these digital means. And if you’re going to do that make sure that it is seamless, it’s not difficult to do,” he added.