Ghana’s Parliament has voted to repeal the Electronic Transaction Levy (E-Levy), a contentious tax on electronic transactions that had been widely criticized for disproportionately affecting low-income earners and stifling financial inclusion.
The repeal is a key component of a comprehensive overhaul of Ghana’s tax system, aimed at providing relief to citizens and businesses, while promoting economic growth and social equity.
The government has also announced plans to abolish other taxes, including the 10% tax on lottery winnings and the Emissions tax, as part of its efforts to streamline the tax system and reduce the burden on taxpayers.
The E-Levy, which was introduced in 2022, had been touted as a means of widening the tax net and capturing revenue from the informal sector. However, it faced intense opposition from the public, who argued that it was unfair, regressive, and had a disproportionate impact on low-income earners, who rely heavily on electronic transactions for their daily livelihoods.
The repeal of the E-Levy is a major victory for President John Dramani Mahama and the National Democratic Congress (NDC), who had campaigned on a promise to scrap the tax. The move is expected to bring significant relief to millions of Ghanaians who had been affected by the tax, including small business owners, traders, and low-income households.
The abolition of the E-Levy is also seen as a major step forward in the government’s efforts to create a more equitable and efficient tax system.
The move is expected to promote financial inclusion, encourage the use of digital payment platforms, and support the growth of small and medium-sized enterprises (SMEs).
The government has assured taxpayers that the revenue lost from the repeal of the E-Levy will be offset by measures to improve tax compliance, reduce tax evasion, and promote economic growth.
The government has also committed to ensuring that the tax system is fair, transparent, and accountable, and that the benefits of economic growth are shared equitably among all citizens.
The repeal of the E-Levy has been widely welcomed by taxpayers, businesses, and civil society organizations, who have hailed it as a major victory for social justice and economic equality.