Ghana e-levy: Government to Restructure Tax

Ghana e-levy Government to Restructure Tax

Ghana e-levy is set to take the new dimension of revamping and restructuring to suit the current economic realities in the West African country.

The government announced this recently as a comprehensive plan to redesign the e-levy or Electronic Transfer Levy. This plan will feature in the country’s Medium-Term Revenue Strategy with a focus on making taxation policies in the nation more effective.

Beyond the relevant role this redesign will play in the Medium-Term Revenue Strategy, the move is in line with the government’s broader revenue restructuring and the collection of taxes especially to align with the best global practice.

Part of the agenda is also to see to the fair distribution of the nation’s tax burden across the different sectors of the economy. It is also important to note that the new restructure will remove the threshold for transactions below ¢100 per day.

GHANA E-LEVY: 1.5% Tax kick Starts on Mobile Money, See Reactions

See the 5 Pillars of Ghana’s Medium-Term Revenue Strategy where the e-levy restructure is to feature:

  1. Broadening Withholding Tax Regime: The strategy seeks to extend the withholding tax regime to cover various tax types. This expansion aims to enhance taxpayer identification, streamline tax collection, and simplify filing procedures, particularly for incomes within the informal sector.
  2. Streamlining Tax Returns: Efforts will be made to simplify tax return processes and improve the modified taxation system to minimize tax avoidance and encourage voluntary compliance.
  3. Review of Outdated Tax Categories: Outdated tax categories such as stamp duty, income tax stamp, and vehicle income tax will undergo thorough review and adjustment to align with current market dynamics.
  4. Enhanced Taxation of Rental Income: The strategy includes measures to ensure a fairer contribution from the rental income sector.
  5. Taxation on Gross Gaming Revenue (GGR): For industry players, taxation on Gross Gaming Revenue will be implemented, along with the introduction of withholding tax on winnings, marking a significant step toward a more comprehensive and equitable tax structure.

More on the ‘Ghana e-Levy’

Recall that the Ghanaian Government in May 2022 had introduced a 1.5% charge on electronic and mobile money as e-levy that eventually met with resistance across the country.

Regardless of the fact that the tax was introduced to increase the government’s revenue. the resistance became prominent as it affected people who made transactions that exceeded ¢100 per day

Responding to the wide resistance, the government pressed further to reduce the e-levy rate from 1.5% to 1% with an exemption threshold for transactions below ¢100 per day.

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