About one million mobile money accounts were inactive after the implementation of the Electronic Transfer Levy in May 2022, a research by the Institute of Statistical, Social and Economic Research (ISSER) has revealed.
This was from 19.1 million to 18.1 million in July 2022.
Following the review, ISSER, said, the number of registered and active accounts and agents remained on an upward trend in January 2023 while the number of active accounts dropped by 100,000 by February 2023.
Between March and April 2022, the total number of transactions fell by 10 million while the total value fell by ¢2.8 billion. Similarly, the total number of transactions fell by 21 million while the total value fell by ¢16.3 billion between April 2022 and May 2022.
There was a reduction in the total number of transactions in June 2022, followed by a period of recovery between July 2022 and November 2022.
Alternate payment platforms grew
It mentioned that Ghanaians immediately resorted to alternate payment systems when the E-levy was implemented.
Furthermore, less than 7% of the target revenue was realised initially. Only ¢93 million out of GH¢1.4 billion was raised
Interestingly, sensitivity to the tax, the announcement of the E-levy led to a growth in alternate payment systems (GHIPPS instant pay, cheques cleared, internet banking, etc). After the E-levy rate was revised to 1%, ISSER said there was a drop in alternate payment systems’ usage.
However, the figures shot up in February 2023 as the effect of the revision was short-lived.
In conclusion, ISSER observed that the E-levy failed to provide the anticipated revenue. Again, it said the tax rate is crucial as marginal reductions (say 0.5%) can make a difference between stakeholder rejection and acceptance of a tax policy.
Source: Joy Business