Ghana’s E-Levy Journey: A Beacon for Mobile Money Taxation in Africa

In the vibrant corridors of digital finance in Africa, Ghana’s experiment with the Electronic Transfer Levy (E-Levy) stands out as a testament to the continent’s evolving economic landscape. Amid the sprawling markets and bustling streets, a quiet revolution unfolds, one where digital transactions promise to redefine the essence of financial inclusivity and economic strategy.

The story begins in Accra, at the Alisa Hotel, where from February 28 and 29, 2024, a workshop titled “Taxing Mobile Money – Lessons and Ways Forward” was convened. This gathering, a brainchild of the International Centre for Tax and Development (ICTD) in partnership with the Ghana Revenue Authority (GRA), brought together minds from various corners of the globe. Their mission? To chart the future of mobile money taxation in Ghana and beyond.

Charles Addae, Assistant Commissioner in charge of Strategy, Research, Policy, and Programmes at GRA, shed light on the E-Levy’s genesis. Introduced in 2022, the levy aimed to broaden Ghana’s tax base by capturing the informal sector’s vast, untapped potential. It was a bold move to ensure a more inclusive taxation system, ensuring that every transaction, no matter how small, contributed to the nation’s coffers.

Yet, the path was fraught with hurdles. Initial projections fell short, sparking a reevaluation of strategies. It was a cycle familiar to many African nations, as Prof. Peter Quartey highlighted in his remarks at the ICTD Conference. The cycle of introduce, stop, redesign, and reintroduce reflects the teething troubles of implementing mobile money taxation across the continent.

Despite the challenges, Ghana’s resolve bore fruit. Adjustments to the E-Levy, including a rate reduction and rigorous public engagement, led to a notable uptick in revenue, signaling the potential for digital transaction taxes as sustainable revenue streams. This success story is underscored by the necessity of evidence-based policymaking, a domain where academia and rigorous research play pivotal roles.

The journey of the E-Levy is more than a tale of taxation; it’s a narrative about partnership, innovation, and the relentless pursuit of a balanced approach to economic development. It underscores the delicate dance between fostering financial inclusion and ensuring the government’s coffers are well-fed to support infrastructure, digital inclusivity, and entrepreneurship.

As Ghana charts its course through the digital economy’s uncharted waters, its experience offers invaluable lessons for other African nations. The crucial role of technology, the importance of stakeholder engagement, and the transformative power of informed policy decisions emerge as key themes.

This story, set against the backdrop of Ghana’s bustling markets and innovative tech hubs, is not just about a tax. It’s about a nation’s journey towards economic resilience, a testament to the power of inclusivity in the digital age. As the continent watches, Ghana’s experiment with the E-Levy stands as a beacon, illuminating the path forward for mobile money taxation in Africa.

In the end, the narrative of the E-Levy is a call to action for African nations. It is an invitation to embrace change, to leverage technology, and to work hand in hand with academia to craft policies that not only grow economies but also ensure that no one is left behind in the digital revolution.