The Mobile Money Agents Association Of Ghana (MMAAG) has expressed the hope that the revised rate of the Electronic Levy (E-Levy) of one per cent, which takes off today, will help revive its business, since operations suffered last year when the levy was introduced.
It said with money transfer businesses having suffered with the rate pegged at 1.5 per cent last year, the reduction of the rate, as the association had called for in the past, would help increase transaction volumes.
The General Secretary of MMAAG, Evans Otumfuor, in an interview with the Daily Graphic, welcomed the downward revision of the rate to one per cent, saying: “This is good news to us. For us, we believe to begin the business year with such a rate will help revive our operations.”
While lauding the decision to reduce the rate, Mr Otumfuor said the association was looking forward to a further reduction of the rate to bring back transaction volumes to the levels they were before the introduction of the levy.
His expectation of a further reduction was shared by both vendors and traders, who said their MoMo transactions went down considerably due to the levy.
Despite calls for the Ministry of Finance to reconsider the rate at 1.5 per cent, that was maintained, but it did not yield the expected revenue, as transaction volumes reduced.
The government had hoped to rake in about GH₵6.9 billion from the collection of the levy on mobile money and other electronic transactions, but the figure was revised downwards to about GH₵4.9 billion following the delay in the passage of the E-Levy bill.
However, in August 2022, the government had to again revise its revenue target from the levy to GH₵611 million.
In the 2023 Budget presentation in Parliament last November, the Minister of Finance, Ken Ofori-Atta, had announced that the rate was going to be reviewed downwards to one per cent to help the government raise enough money from that tax.
Consequently, the Electronic Transfer Levy (Amendment) Act 2022, Act 1089, was amended to reflect the new rate, passed by Parliament and assented to by President Nana Addo Dankwa Akufo-Addo.
With the GHC100 threshold unchanged, an estimated GH¢2.2 billion is expected to be generated from the levy in 2023.
The Ghana Chamber of Telecommunications (GCT), on behalf of the Electronic Money Issuers (operators of mobile money services), announced yesterday that the new rate would take effect from today.
The CEO of the GCT, Dr Ken Ashigbey, said its systems were ready for the new rate after the successful configuration of its operational system, in accordance with the directive from the Ghana Revenue Authority (GRA) on the implementation of the revised E-Levy rate.
“Once the amendment was made and the bill passed, we had to wait for all the legal processes while we also prepared technically. Now our systems have been reconfigured, and with effect from January 11, the new rate of one per cent after the GHC100 threshold will be charged,” he told the Daily Graphic.
The operators of mobile money services include Airtel Mobile Commerce (Ghana) Limited, Mobile Money Limited, GCB G-Money, Vodafone Mobile Financial Services Limited and Zeepay Ghana Limited.
Reacting to the announcement, the General Secretary of MMAAG said mobile money transactions remained one of the safest and most convenient transactions and remittance, saying he was hopeful that those who, for various reasons, decided not to use the transaction, would be encouraged to do so now.
“Although we had expected the reduction to go below one per cent, we still believe that half a loaf is better than none and thus welcome the new rate,” he added.
He explained that mobile money businesses were performing astronomically well until the announcement of the E-Levy.
Mr Otumfuor indicated that a result of the implementation, operators were compelled to close down and some laid off workers, as transaction volumes reduced drastically.
On its expectations, he said the association expected an appreciation in transaction volumes and values on the mobile money platform.
“With this, we hope to see our volumes increasing again as they were in the past. We want to see traffic at our business points, and we want to see our revenues shooting up,” he said.
The general secretary further appealed to the government to support the agents in the form of commission and tokens.
He explained that agents’ contribution towards the government’s revenue mobilisation was enormous, hence the need to reward them in the form of tokens and commissions.
“We want the government to design commission for agents to enable them to maximum the work they do because without the agents investing their money and opening their shops on time, this E-Levy will not progress,” he added.
Good for vendors
An agent, Mr Eshun, in an interview with the Daily Graphic, said although the 1.5 per cent rate affected individual transactions, it was good for vendors, as customers who did not want their money to be deducted on most days resorted to sending money through MoMo vendors, which helped the vendors get a lot of profit.
A MoMo agent, Iddrissu Shamsudeen, said the E-Levy was good, especially for vendors.
He explained that the E-Levy charges had no effect on vendors’ transactions.
"When I do any transactions, E-Levy doesn't work on me, so I don't have any problem with them reducing the charges,” he said.
Some traders, in an interview with the Daily Graphic, welcomed the new rate, saying it would be good for transactions.
“Before the E-Levy, I used to pay for my goods before I got to where they were, just to be safe from robbers. However, when the levy was introduced, some of us stopped using it because of the high rate.
“Carrying the cash on me was an inconvenience and a risk, but since I would go for my goods any way, I did not mind taking the cash along. With the rates revised down, most of us will go back to transacting business with it,” Maame Yaa Ataa, a tomato trader at the CMB Market, said.
“Before the E-Levy, customers bought items and paid by MoMo. Sometimes they would call and we sent the items to them while they paid via MoMo. Once the levy was introduced, my business lost most of such customers, but I hope that will be revived now that the rate has been reduced,” Oblaanu Yemofio, a dealer in clothing at Adabraka, said.