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Business News of Wednesday, 24 November 2021

Source: 3news.com

Taxing MoMo will lead to taxing savings – Ato Forson

Ranking Member of Parliament’s Finance Committee, Dr. Cassiel Ato Forson Ranking Member of Parliament’s Finance Committee, Dr. Cassiel Ato Forson

The Minority Spokesperson on Finance, Casiel Ato Forson has said a move by the government to tax Mobile money transactions will mean taxing savings of the people.

He explained that people keep money on mobile money accounts as savings. Therefore any attempt to tax that transaction will target at taxing people’s savings.

Contributing to a debate on the 2022 budget statement in Parliament on Tuesday, November 23, Mr Ato Forson who is a lawmaker for Ajumako-Enyan-Esiam rejected the move by the government to levy MoMo transactions.

Taxing Mobile Money, he said, “will mean taxing people’s savings,”

Finance Minister Ken Ofori-Atta announced a new levy to be charged by the government in 2022 on all electronic transactions to widen the tax net and rope in the informal sector.

“It is becoming clear there exists an enormous potential to increase tax revenues by bringing into the tax bracket, transactions that could be best defined as being undertaken in the ‘informal economy,” Mr Ofori-Atta observed on Wednesday, November 17 as he presented the 2022 budget statement in Parliament.

“After considerable deliberations, the government has decided to place a levy on all electronic transactions to widen the tax net and rope in the informal sector. This shall be known as the ‘Electronic Transaction Levy or E-Levy’.”

He explained that the new E-levy will be a 1.75 percent charge on all electronic transactions covering mobile money payments, bank transfers, merchant payments and inward remittances to be borne by the sender except inward remittances, which will be borne by the recipient.

This will, however, not affect transactions that add up to GH¢100 per less per day.

“A portion of the proceeds from the E-Levy will be used to support entrepreneurship, youth employment, cyber security, digital and road infrastructure among others.”

This new levy is scheduled to start Saturday, January 1, 2022.

In 2020, the total value of transactions was estimated to be over GH¢500 million with mobile money subscribers and users growing by 16 percent in 2019.

According to a Bank of Ghana report, Ghana saw an increase of over 120 percent in the value of digital transactions between February 2020 and February 2021 compared to 44 percent for the period February 2019 to February 2020 due to the convenience they offer.

This was definitely heightened by the advent of Covid-19, especially during the lockdown.