The E-Levy Tax on mobile money and other Electronic transactions is to raise about ¢6 Billion a year. The money is envisaged for Youth Employment Creation, Start up and continuing business soft loans, Rapid road Construction nationwide etc.
Should we achieve this target and use the monies for the intended purposes in the next 3 years, there would be huge benefits especially in the Road Sector and the Youth Employment/ Enterprise creation sectors. However the introductory rate of 1.75% in my opinion is too high.
I will be happy with 1.25%-1.50%, which may mean a reduction to 4.3 Bn – 5.1Bn Cedis ( respectively) of the estimated 6Bn Cedis per annum.
This straight line estimate of ¢4.3Bn to ¢5.1Bn could even be higher because a lower rate will reduce the quantum of attrition in use of E Transactions due to the introduction of the rate at 1.75, which the majority see to be too high.
Note that there was an estimation of attrition/reduced patronage, which was factored into the estimated 6 Billion Cedis per annum.
MITIGATING THE HIGH COST OF TRANSACTIONS BECAUSE OF THE E-LEVY
Many people’s argument is that it will cost about 2.75% to send mobile money to every network, and upto 3.25% using interoperability.
This is not 100% true. Whether you pay 1.75% or more than that is totally dependent on you as a user. I use VODAFONE CASH. I pay ABSOLUTELY NOTHING to send money to MTN Momo or AirtelTigo Money.
When this tax comes into effect, I will pay 1.75% to send money to any network. So whilst it costs others 2.75 Cedis or 3.25 Cedis to send 100 Cedis (after they exceed their 100 Cedis a day threshold) , I will be spending 1.75 Cedis to send that same amount to ANY NETWORK in Ghana.
If you will continue to use those networks that charge to send mobile money and pay the additional 1.75% or switch to ones that charge 0 Fees and pay just 1.75% is entirely up to you as a consumer of services.
GHANA PAY MOBILE MONEY PLATFORM FOR BANKS
Many of us are not aware that a new platform for Mobile Money involving ALL BANKS in Ghana will roll out most probably next month.
It doesn’t matter which network or bank you subscribe toWith this “Ghana Pay” platform, customers and non customers of banks can, using the app, move money from any mobile money wallet or bank account into the Ghana Pay App.
Govt should endeavour to make the use of the Ghana Pay App totally free like Vodafon Cash. Govt has also bought AirtelTigo.
The advantage of Govt ownership of such strategic businesses is to be able to leverage on ownership/control, to force prices and charges in that industry down.
Let us make AirtelTigo money also zero charges as Vodafon does. This will ensure that rates are user friendly, especially when reduced to say 1.25% as I have argued, meaning a transaction that cost 1 Cedi before the tax will just increase to 1.25 Cedis, and few will make noise about it.
USAGE OF THE TAXES AND THE OPTICS OF IT.
One reason citizens, especially of Ghana and other African countries, detest new taxes so much is the argument that they do not see any proper use to which the taxes are put.
For this reason I think Govt should do well to SHOW the public what these specific taxes are used for. For roads for example, the Kufuor example of HIPC BENEFIT signposts will be a good idea.
Kufuor faced serious resistance and challenge when deciding to go HIPC (till date I don’t get the head or tail of the opposition to HIPC even from his own cabinet but that is for another day).
Thus when the benefits manifested in infrastructure, his Govt boldly labeled all projects that had come to fruition because of his decision to go HIPC.
That was to point to Ghanaians that without that decision those projects would not have existed. With the controversy surrounding this E-Levy, and for even the political ramifications and political future of the NPP Govt, monies accumulated from this tax should be used SOLELY for the purposes attached to the proposal and the whole Ghana should be made to know about them.
Example, the dual carriage road being constructed from A to B is because of the E-Levy we are paying. Or, the 5,000 new enterprises that have opened and created say 75,000 direct jobs in a particular year are due to the E-Levy which funds the YouStart Business Finance Initiative etc. Something like the 1D1F projects. NEVER PLAY WITH OPTICS AS A GOVT else your good deeds will be buried.
I will argue for a reduction of the rate like I stated earlier, to 1.25% for this year, or maximum 1.50%. But most importantly, many more CHEAPER options for Mobile Money Transactions in Particular, like the Ghana Pay Platform coming out next month, should be promoted, to enable 0% transaction cost.
With the transaction costs eliminated as it is with Vodafone cash, a 1.25% E-Levy will face very little resistance, and coupled with results that are manifestly clear, the angst of the people will reduce greatly or be even wiped away totally .
Source|osimpamfm.com|Richard Owusu Tawiah