Accept 1.75% MoMo tax; MoMo to bank transactions won’t be levied – Gov’t pleads with Ghanaians

The government has asked Ghanaians to accept the 1.75 per cent E-levy on Mobile Money and all electronic transactions.

Addressing the media at the New Patriotic Party’s headquarters in Accra, Deputy Minister of Finance John Kumah, said “so, the government is pleading with the entire citizenry in the country that we acknowledge the hardship that we are in. We are pleading that Ghanaians would accept the tax which is the E-levy”.

“It is only when you send GHS200 [that] you are charged GHS1.75 per cent. Even your first GHS100 would not be charged, the MoMo levy would apply on your second GHS100″.

“Secondly, all money from your MoMo account to your bank account would not attract any charges, likewise, when you transfer money from your bank account to your MoMo account you don’t pay any charges”, he explained.

“Now, I beg to say that it is not with joy that the government imposes tax but the truth of the matter is that there is no nation that can be built without taxes”.

“We need as a citizen and as a nation help to raise resources so that we can spend on the things that we expect the government to do. In building us roads, hospitals, infrastructure and providing jobs for the young people”, he added.

Ghanaians have raised eyebrows over the 1.75 per cent tax on MoMo as announced by Finance Minister Ken Ofori-Atta in the 2022 budget presentation on Wednesday, 17 November 2021.

Presenting the budget, Mr Ofori-Atta explained that the upsurge in the use of e-payment platforms as a result of the COVID-19 pandemic has been an impetus for the introduction of the levy.

As a result, Ghana recorded a total of GHS500 billion from e-transactions in 2020 compared with GHS78 billion in 2016.

He said: “It is becoming clear there exists an enormous potential to increase tax revenues by bringing into the tax bracket, transactions that could be best defined as being undertaken in the informal economy.”

He noted, therefore, that the government is charging an applicable rate of 1.75% on all electronic transactions covering mobile money payments, bank transfers, merchant payments and inward remittances, which shall be borne by the sender except inward remittances, which will be borne by the recipient.

“Mr Speaker, to safeguard efforts being made to enhance financial inclusion and protect the vulnerable, all transactions that add up to GHS100 or less per day, which is approximately GHS3,000 per month, will be exempt from this levy”, he stated.

He said E-Levy proceeds will be used to support entrepreneurship, youth employment, cyber security, and digital and road infrastructure, among others.

“Mr Speaker, this new policy also comes into effect once appropriation is passed from 1st January 2022. The government will work with all industry partners to ensure that their systems and payment platforms are configured to implement the policy,” he said.



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