Former Finance Minister Seth Terkper has stated that the government needs to reconsider the E-Levy before it is imposed on consumers.
Because the mobile money sector is a relatively new sector, he believes that taxation of financial services in the cashless economy should be concentrated on a more mature segment of the industry.
On Wednesday, the former finance minister made these remarks during a virtual meeting hosted by PFM-Tax Africa Network on the 2022 Budget Review (24 November).
Consumers, according to Terkper, are already paying the existing Communication Service Tax (CST), which has a similar goal to the E-Levy in that it encourages business and provides job chances for the youth.
“All telcos attract VAT,” he continued, “whether the VAT is sound or not, businesses pay, and these parts are already included in consumption tax.” So that’s the point we’re making, and it’s the reason why some of us believe the E-Levy needs to be rethought.”
“The CST is both a service tax and a consumption tax because it is ultimately consumers who will pay.” Even if businesses are required to pay, the burden will be shifted to the customer,” he said.
The finance minister said the government has chosen to impose a fee on all electronic transactions to broaden the tax net and bring in the informal sector when presenting the 2022 Budget Statement in Parliament on Wednesday.
“Electronic transactions, including mobile money payments, bank transfers, merchant payments, and inward remittances, will be charged at a rate of 1.75 percent, which will be incurred by the sender except for inward remittances, which will be borne by the receiver,” Ofori-Atta explained.