E-levy risks promoting acts of money laundering – Tax Expert

Tax Expert and Lecturer at the University of Ghana School of Law, Dr. Abdallah Ali Nakyea has indicated that the impact of the imposition of the Electronic Transaction levy may promote acts of money laundering.

He also says if the tax is imposed, people may start looking for other innovative ways of moving about funds, without going through the mobile money system.

“What we call agent banking would start, where people would be moving around and moving the cash, or turning it into something else,” he said during a presentation at a virtual joint meeting organized by the Rotary Club of Spintex on the topic: E-LEVY-THE WHAT, THE WHY AND THE HOW,

Dr. Nakyea noted the E-levy would derail the benefits from the on-going SIM-card registration exercise aimed at driving down fraud and money laundering.

“By introducing the proposed tax, there is a risk that all these players could revert to using cash (because of cost), thus increasing fraud incidences and supervision costs,”

He has called for further deliberations and analysis on the Electronic transaction levy.

“This is a policy that requires further deliberations and analysis, hence not ripe for implementation in the state in which it has been proposed.”

The tax has been the bone of contention since the government presented its 2022 Budget statement to the House last year.

The Finance Minister has indicated that the move will increase the country’s tax-to-GDP from 13% to a targeted 16% or more.

But the Minority in Parliament has also insisted that the 1.75% tax is a tool to exacerbate the plight of the ordinary Ghanaian, which the Covid-19 pandemic has already impacted.