Seth Terkper, a former finance minister has said the government needs serious rethink on the introduction of the E-Levy before it is imposed on consumers.

According to him, taxation of the financial services in the cashless economy should be focused on a more matured area of the industry since the mobile money sector is a relatively new sector.

The former finance minister made these comments at a 2022 Budget Review organized by PFM-Tax Africa Network in a virtual meeting on Wednesday (24 November).

Terkper said consumers were already paying the existing Communication Service Tax (CST) which has a similar objective as the E-Levy and thus support entrepreneurship and create employment opportunities for the youth.

He said, “All the telcos attract VAT, whether the VAT is sound or not, businesses pay and these elements go into consumption tax already. So, that’s the point that we’re making and the basis on which some of us think that the E-Levy needs a rethink.”

“CST is a service tax and is a consumption tax because ultimately it is consumers that are going to pay. Even though it is businesses that are supposed to pay, it’ll be pushed to the consumer,” he stated.

Presenting the 2022 Budget Statement in Parliament on Wednesday, the finance minister said the government has decided to place a levy on all electronic transactions to widen the tax net and rope in the informal sector.

“Electronic transactions covering mobile money payments, bank transfers, merchant payments and inward remittances will be charged at an applicable rate of 1.75% which shall be borne by the sender except for inward remittances, which will be borne by the recipient,” Ofori-Atta said.

The announcement has been greeted with diverse reactions from the general public.