University of Ghana’s Business School Professor, Godfred Alufar Bokpin, has described as “backward”, the electronic levy (E-Levy) that has been scrapped by the government.
The repeal of the bill was approved by Parliament Wednesday, March 26, 2025, after government promised to scrap the levy which many described have said is nuisance.
According to the Economics Professor, the E-levy was “poorly designed”, adding that the scraping of same is a step further towards development.
He has congratulated the government for taking such a bold step, having heard the reaction of stakeholders, including mobile money vendors whose enterprise was much affected by the policy.
“We’ve heard from the stakeholders and the vendors, and I think Ghana is waking up. I congratulate the government for taking that decision,” he said on Accra-based JoyNews Wednesday, March 26, 2025.
The repeal of the E-Levy has come as a relief for many Ghanaians who saw that tax as a nuisance and kicked against its passage but still got through by the previous administration.
Introduced in 2022 by the erstwhile New Patriotic Party administration, the e-levy imposed a 1.5% tax on electronic transactions, including mobile money transfers, bank transfers, and online payments.
According to Prof. Bokpin, the policy was a failure in several spheres including compliance costs, inconvenience, and economic logic.
“If you look at the last two and a half years of the NPP administration, almost every six months, you have to reconfigure your system to be tax compliant. The compliance costs incurred by banks, financial institutions, and manufacturing companies—just to be compliant—are huge,” he indicated.
He further asserted that the policy did not undergo the requisite scrutiny prior to its implementation.
“Even at the Ministry of Finance, the tax policy unit, I’m not sure this one was really subjected to critical analysis, sensitivity analysis, and all of that. So if it’s more emotionally driven, and the results are quite clear, then it tells you it was poorly designed.”
He lamented the economic irrationality of taxing transactions that are already within the tax net.
“You send money to your wife after having paid your taxes, and you have to pay a lot of tax on it again. I don’t want to say it’s evil, but it was backward,” he averred.
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