The government has abolished road tolls, and a fee on MoMo transactions has been implemented. #BUDGET2020
Toll collecting staff will be moved, and the change is intended to boost productivity while also lowering pollution levels according to the Finance Minister
The government has abolished road tolls.
“Mr. Speaker, our roads require fixing,” Mr. Ofori Atta said as he read the 2022 Budget in Parliament on Wednesday. Our highways are being repaired. True, more roads have been repaired and are being repaired in the last five years than at any other time in our country’s history. We’d want to do much more.
“That is why, for decades, successive governments have imposed and maintained tolls on some public roadways in order to earn cash for road development and upkeep. In many nations, this is the case. Tolling stations have caused high traffic on our roadways and increased travel time between locations, significantly hurting time and production.
Congestion at tolling stations causes pollution in and around the affected areas, in addition to these inconveniences.
To deal with these issues, the government has removed all tolls on public highways and bridges. This goes into effect as soon as the Budget is approved. Personnel in charge of toll collecting will be transferred. The predicted increase in production and reduction in pollution will more than compensate for the income lost by eliminating tolls.
According to the Minister, the government is aiming to adopt creative means of earning income to compensate for the road tolls, such as the planned 1.7 percent phone transactions charge payable by mobile money users every transaction over GHS 100.
He claims that this will assist the government in bolstering income inflows in order to support road construction around the country.
“Total transaction value is expected to exceed GHS 500 billion Cedis in 2020, up from GHS 78 billion Cedis just five years ago, while total mobile money subscribers and active mobile money users have risen at an average rate of 18 percent and 16 percent respectively between 2016 and 2019.” Mr. Speaker, it is becoming evident that bringing transactions that are best described as being conducted in the “shadow economy” into the tax category has huge potential for increasing tax collections.
“Following much debate, the government has decided to impose a fee on all electronic transactions in order to expand the tax net and bring the informal sector into the fold.” The “Electronic Transaction Levy, or E-Levy,” will be called as such.
“Electronic transactions, including mobile money payments, bank transfers, merchant payments, and inward remittances, will be taxed at a rate of 1.75 percent, which will be funded by the sender, with the exception of inward remittances, which will be incurred by the receiver.”
“Mr. Speaker, in order to defend efforts to improve financial inclusion and protect the vulnerable, any transactions totaling less than GH100 per day (about GH3000 per month) will be excluded from this fee. A portion of the E-Levy funds will go toward entrepreneurship, youth employment, cyber security, and digital and road infrastructure, among other things.
“Mr. Speaker, this new policy will take effect on February 1st, 2022.” The government will engage with all industry partners to ensure that their systems and payment platforms are set up to support the policy’s implementation.”