Governor of the Bank of Ghana, Dr. Ernest Addison, has said it is not yet time to scrap the electronic payment levy (E-levy) despite the disruption it has created in the financial inclusion agenda.

Data published by the central bank show strong disaffection for the tax from the people as the mobile money platform registered a GH¢16.3billion loss in value in May – the very month the tax was introduced – from the GH¢87.7billion recorded in April.

Then, in June, the value of transactions hit GH¢77.4billion, indicating a GH¢10.3billion drop from what was recorded in April, albeit higher than the GH¢71.4billion registered in May.

In terms of the number of transactions, mobile money experienced another setback as activity on the platform has declined by 25 million since April – from 403 million to 378 million in June. Furthermore, the balance on float, thus, the amount on people’s wallet on the payment platform, has also declined to GH¢9.3billion, shaving off GH¢300million since April.

These massive disruptions, largely stemming from customers’ discontinuous or reduced use of the platform, have never been experienced since the introduction of the payment system in the country, hence, prompting calls for the tax to be scrapped, especially when the Finance Ministry has come out to admit that the tax has only yielded less than 10 percent of its expected revenue.

However, Governor of the Bank of Ghana, Dr. Addison, still feels it is too early to abolish the tax, saying, that certain exemptions granted by the E-levy tax law could be responsible for the low revenue recouped from the levy so far, hence, given time, it will perform better.

“I don’t think it is time to scrap E-levy. Discussions that I have been privy to has been on the level of exemptions granted under the E-levy law. So, I know there is some work which is currently on-going to relook at those exemptions; and hopefully, when that is completed, the levy will bring in more resources than currently,” he told journalists on Monday, during a press conference to announce the policy rate.

The IMANI survey

A survey conducted by IMANI Centre for Policy and Education, in collaboration with Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), revealed that about 83 percent or eight in 10 respondents indicated that their volume of transactions has changed since the implementation of the E-levy in May 2022.

The research, which interviewed 1,677 respondents across the country, was aimed at determining the impact of the E-levy on Ghanaians and the coping mechanisms Ghanaians had adopted since its passage in May this year.

Of this number, about 47 percent indicated that they had reduced the number of mobile money transactions by about 51 percent to 100 percent. “Our findings suggest that the official 24 percent attrition rate, which government estimates for the first three to six months following the introduction of the e-levy, is likely to be much higher. This findings imply that the forecasted GH¢4.5billion E-levy revenue target for 2022 is unlikely to be attained, given the strong consumer backlash, and people finding alternative means of undertaking financial transactions,” the survey said.