A full list of transfers that will be free of charge: The Ghana Revenue Authority (GRA) has identified the transactions that would not be impacted by the new tax policy as Ghanaians prepare for the implementation of the Electronic Transfer Levy (E-Levy) next month.
Continue >>> full list of transfers that will be free of charge
Despite the Authority’s aim of broadening the tax net, not all electronic transactions will be subject to the 1.5 percent tax rate.
- A cumulative transfer of ¢100 is made by the same person.
- A transfer between accounts owned by the same person.
- Transfers for the payment of taxes, fees, and charges on the Ghana.gov platform
- Electronic clearing of cheques
- Specified merchant payments (that is, payments to commercial establishments registered with the GRA for income tax and VAT purposes)
- Transfers between the principal, master agent, and agent’s accounts.
For the transfers that will be affected; a Principal Revenue Officer and Head of the Project Management Unit said the Authority, Isaac Kobina Amoako said;
- Mobile money transfers are done between accounts on the same Electronic Money Issuer.
- Mobile money transfer to a receiver on another Electronic Money Issuer [Interoperability transfer]
- Transfer from a bank account to [another person’s] mobile money account.
- From a mobile money account to [another person’s] bank account.
- Bank transfers on an instant paid digital platform.
Since Finance Minister Ken Ofori-Atta suggested the E-levy while presenting the 2022 budget in November 2021, it has sparked a lot of debate in Parliament and among the general public.
He said that the “innovative” tax will help the government diversify its revenue sources.
Economists and the Minority in Parliament, on the other hand, believe the Levy would exacerbate the problems of ordinary Ghanaians.
The E-Levy Bill was passed by the Majority-sided Parliament on Tuesday, March 29 after nearly three months of back and forth, including fisticuffs among Parliamentarians.
Despite a Minority walkout, the Levy was passed at a lower rate of 1.5 percent than the initial 1.75 percent.
How to avoid the E-levy
1. Send a maximum of GHC 100 daily
- Since E Levy Charges will not apply to mobile money transfers of less than GHC 100 made by one person per day, it is advisable for people who don’t want to be deducted to send a maximum of GHC 100 to your receiver every day until the entire amount you intend to send is depleted. For example, if you wish to pay GHS 300 to your Son every month, start by sending GHS 100 every day until he receives the GHC 300 in full.
In another case:
If you send GHC 300 to your mother’s MoMo number, you will be charged 1% ie GHC 3 by MTN then charged 1.75% ie GHC 5.25 by the government. Then when she withdraws, she will be charged GHC 3. So on one transaction of 300, total deductions will be GHC11.25.
Do this instead. Let her go to a MoMo vendor and mention your number to the vendor. Allow Cash-Out wherever you are and give your ID number. The vendor initiates withdrawal and it comes to you for approval wherever you are. You approve. Your mother receives cash. This way you avoid MTN charges on transfer and you avoid the MoMoTax
You only pay GHC 3 on GH 300 instead of 11.25 cedis.
We owe a duty to ourselves to make sure these charges don’t finish us.
2. Use Cash Transactions
- Instead of using Mobile Money Transfers, use cash in your transactions more often.
3. Cheque Payments
- Payments can be Made By Cheque as well for people who want to avoid the e-levy Charges.