E-levy (Ghana)

The Electronic Transfer Levy (E-levy) was a tax on electronic transfers in Ghana, implemented on May 1, 2022. The tax was officially called the Electronic Transfer Levy Act, 2022 (Act 1075). It applied to electronic transfers above a certain threshold, typically GH¢100 (approximately $8 USD) per day, and was initially set at a rate of 1.5% of the transaction amount.

The levy aimed to broaden the tax base and increase government revenue, which the government intended to use for infrastructure development, job creation, and debt reduction. Revenue projections associated with the E-levy were significant components of the national budget.

The E-levy was highly controversial. Supporters argued it was necessary for Ghana's economic development and self-reliance, lessening dependence on foreign aid and loans. They also claimed it would capture revenue from the informal sector, where many transactions are conducted electronically.

Opponents argued that the E-levy was regressive, disproportionately affecting lower-income Ghanaians who rely heavily on mobile money for transactions. Concerns were also raised about its potential impact on financial inclusion, disincentivizing electronic transactions and potentially pushing people back to cash-based systems. Critics further questioned the government's revenue projections and the potential for mismanagement of funds. The levy also faced resistance due to its potential impact on the cost of doing business and its effect on Ghana's digital economy.

Following widespread public outcry and failure to meet revenue targets, the E-levy was repealed by the Ghanaian Parliament on December 21, 2022, and took effect on January 1, 2023. The repeal was preceded by ongoing debates about its effectiveness, fairness, and impact on the Ghanaian economy. Alternative revenue generation strategies are currently being explored.