Agents must block ‘dubious cash-outs’ - Tax Specialist urges

BY: Maxwell Akalaare Adombila

A Tax Specialist at Oxfam in Ghana, Dr Alex Ampabeng, has urged the government to persuade mobile money (MoMo) agents across the country to stop allowing cash withdrawals that looks suspicious.

Dr Ampabeng said the government must also implore on the agents to insist on seeing the identification (ID) cards of persons withdrawing money before granting their requests.

That, he said was needed to ensure that people did not use the MoMo withdrawal routes to avoid paying the levy when making transfers covered under the E-Levy Act, 2022 (Act 1075).

Cash-out occurs when a MoMo user authorises withdrawal of funds from his/her account through an agent.

Incidence of avoidance

The tax expert at Oxfam in Ghana was speaking to the Graphic Business on how to reduce incidences of avoidance and boost collections from the levy.

It came after reports emerged that instead of making third-party transfers, people were allowing ‘cash-outs’ to their potential beneficiaries in place of transfers to avoid paying the levy.

Dr Ampabeng said under the circumstance, there was less the government could do beyond persuading MoMo agents to fish out people who were aiming to avoid paying the tax through ‘cash-outs.’

“It is a loophole and almost every tax has such weaknesses. What the government can do is to work with the agents to insist that people bring the hardcopies of their ID cards before they can be made to make withdrawals.

“That way, they can detect and fish out suspicious ‘cash-outs’ and then block them,” the Tax Specialist at Oxfam in Ghana said.


While noting that the proposal could only prove effective if the agents were cooperative, Dr Ampabeng said the commission nature of their transactions risked limiting the impact.

“The agents rely on the commissions and the more withdrawals people make, the more commissions or revenues they make.

“Now, for them to reduce withdrawals in order to curb the avoidance means that their commissions will reduce and I do not see them cooperating because already, the transactions are reducing on the back of the levy,” he said.

He, therefore, noted that any effort to curb dubious withdrawals as a way to fight avoidance would be dependent on the level of cooperation that the government would secure from the MoMo agents.

Increase transparency

Additionally, Dr Ampabeng said the government must be transparent with the amount raised and how it was used to help encourage payment.

He said the pledge by the Finance Minister, Mr Ken Ofori-Atta, to publish the amount collected on quarterly basis was welcoming but should be followed through.

He advised the government to avoid spreading the revenue mobilised from the levy on many projects because that would reduce the impact.

“The best way to encourage payment is for government to earmark the usage of the funds.

“If, for instance, the budget says that E-Levy will be used to fund the dualisation of the Pokuase to Nsawam highway, that should be done and published that this project was funded from the E-Levy revenue.

“The same can be done for other infrastructural projects. If people start seeing the benefits of the levy, they will not hesitate in paying it and the incidence of avoidance will be reduced,” he said.

No avoidance

The Manager of Regulatory, Policy and Compliance at Vodafone, Ernest Osei-Poku, said in a separate interview that the company had not detected any instances of tax avoidance.

“Since implementation of the E-Levy on May 1, we have not observed any instances of tax avoidance by subscribers nor any collusion between agents and subscribers to avoid paying the tax.

“We are happy to look into specific cases should they arise,” Mr Osei-Poku said in response to enquiries.

On the impact of the levy on transactions, he said the company was still analysing the data.

He said such analyses would enable it to have a better understanding of the impact, as well as customer trends.

“Information is shared regularly with the regulator and when the impact is clearly understood, we will be in a better position to inform the public,” Mr Osei-Poku added.