E-Levy, Momo Tax: Everything you Need to Know about the Revised 1.50% Electronic Levy

The Finance Minister, Ken Ofori Atta Hon., announced a new 1.75% e-levy on all electronic transactions in the 2022 budget, sparking a public outcry on social media since last year.

Since then, there has been several debates and public education and reviews on this new electronic levy bill, the government through the Ministry of Finance and the Parliament of Ghana agreed to cut the rate of the E-Levy downwards to 1.50%, which has now been approved and passed by the Parliament Of Ghana.

The new ‘e-Levy or Momo tax‘, according to the Finance Minister, will help the government “widen the tax net and rope in the informal sector”. Meanwhile, a portion of the revenue generated will be used to support entrepreneurship, cyber security, and road infrastructure initiatives.

“After considerable deliberations, the government has decided to place a levy on all electronic transactions to widen the tax net and rope in the informal sector. This shall be known as the ‘Electronic Transaction Levy or e-Levy’.”

“A portion of the proceeds from the E-Levy will be used to support entrepreneurship, youth employment, cyber security, digital and road infrastructure among others, ” he stated.

e-Levy

What is the meaning of E-Levy?

The E-Levy is a new tax measure that will be applied only to the originator of a transaction on an electronic platform. Electronic platforms include the following: fintech platforms, online banking, and momo platforms.

How much is the E-Levy percentage?

The E-Levy stood at 1.75 %. However, the revised e levy percentage is now 1.50%. The government will apply a rate of 1.50% on all applicable transactions.

When does the e-Levy take effect?

The Momo-tax or e-levy policy is scheduled to start on May 1st, 2022.

How will the e-levy be applied?

The levy will be applied to every transaction above GHS 100 on a daily basis. That is, after every GHS 100(cumulative spend) in a day the e-levy will be applied. For example, if Kofi sends GHS 50 to his sister in the morning and sends another GHS 50(totaling GHS 100) to his brother in the afternoon, he will not pay the E-levy. However, any other payment after this threshold will attract the e-levy. That being said, everyone is given a Tax-free amount of 100gh every day.

What does the e-levy affect?

E-Levy affects Mobile money transfers done between accounts on the same MOMO network(MTN-MTN, VODA-VODA, AIRTELTIGO-AIRTELTIGO). Mobile money transfers from an account on one network to another network(MTN-VODA or AIRTELTIGO transfers). Transfers from bank accounts to mobile money accounts. Transfers from mobile money account to bank accounts.

What transactions are excluded from the E-Levy

Transfer between accounts owned by the same person: if you are sending money to your own account (i.e., of the same person) then you will not be charged the E- Levy. A transfer from Kojo’s Tigo wallet to his MTN wallet or from his CBG bank account to his CB bank account or from his savings account to his current or investment account, will not attract the levy. Transfers between momo merchants(agents & super agents), Transfers for payment of Taxes. Electronic clearing of cheques.

What does this mean to the average Ghanaian?

According to the Minister, every Ghanaian is expected to pay a GHS 1.50 charge on all transactions above GHS 100. A GHS 15.0 charge on all transactions above GHS 1000. And a GHS 150.0 charge on all transactions above GHS 10,000 and so on. Mobile money payments, bank transfers, merchant payments, and inward remittances are all examples of electronic transactions that will be taxed.

He did, however, clarify that any transaction under GHS 100 in a day is zero-rated and incurs no additional fees.

Who takes the charges?

According to the minister, the 1.5% e-levy will be paid by the sender on all mobile money payments, bank transfers, and merchant payments. If Kofi wants to send Ama money, then only Kofi will pay E-Levy.

Does paying Tax through MOMO to the GRA attract 1.5% e-levy

No, the payment of taxes, etc. on Ghana.Gov does not incur the E-levy.

Are utility and airtime payments subject to the E-levy?

Yes. Once the payment is made from a mobile money account, bank account, or through a merchant payment platform; and exceeds the GHS 100 daily threshold the levy is payable.

Does e-Levy affect Mobile money withdrawal or cash out?

No, According to the GRA, the e-levy does not affect Mobile money withdrawal or cash out.

Does e-Levy affect MOMO cash in deposits?

No, Cash-in into an individual’s own wallet will not be subject to the E-Levy. This means anytime you want to put money in your momo wallet, you won’t pay the momo tax.

Will Transfers to Investments accounts be taxable by e-Levy?

No, E-Levy will not be charged on investment accounts

How do I get back my E-Levy money deducted when the transfer is reversed?

Your e-Levy money will be reversed back to you as and when the reversal has been completed

Are foreign or inward remittances subject to the Levy?

No, foreign remittances like Western Union, ZeePay, Unity Link, Ria, Tap Tap Send, etc. are not subject to E-Levy

Will MOMO merchants pay e-Levy when sending cash?

No, Mobile money merchants fall in the principals, master-agents, and agents categories, therefore transfers they make will not be subject to e-Levy.

Why is Government Taxing 1.50% e-levy electronic transactions?

Prior to the announcement of the 2022 budget, the Ghanaian government was looking for long-term revenue sources to complete the country’s inadequate road development projects.

The discussion was how much revenue the road tolls were bringing to the state and the need to increase such revenues to cover the road infrastructure deficit in the country.

What are the e-levy chart and charges on Momo?

Below are the new e-levy Charges list on Mobile money (MOMO) in Ghana. This is calculated based on the revised fees from the Telco to reduce their charges by 25%.

MOMO Amount you are sending Telco’s 0.75% charge E-levy charges of 1.5% Total Charges (e-Levy+ Telco charge) New MOMO Amount to pay
GH₵ 100 GHp 0.75 GH₵ 0.00 GHp 0.75p GH₵ 100.75
GH₵ 150 GH₵ 1.125 GH₵ 2.25 GH₵ 3.38 GH₵ 153.38
GH₵ 300 GH₵ 2.25 GH₵ 4.50 GH₵ 6.75 GH₵ 306.75
GH₵ 500 GH₵ 3.75 GH₵ 7.50 GH₵ 11.25 GH₵ 511.25
GH₵ 650 GH₵ 4.87 GH₵ 9.75 GH₵ 14.62 GH₵ 664.62
GH₵ 800 GH₵ 6.00 GH₵ 14.00 GH₵ 20.00 GH₵ 820.00
GH₵ 1000 GH₵ 7.50 GH₵ 15.00 GH₵ 22.50 GH₵ 1,022.5
GH₵ 2000 GH₵ 15.00 GH₵ 30.00 GH₵ 45.00 GH₵ 2,045.0
GH₵ 3000 GH₵ 22.50 GH₵ 45.00 GH₵ 67.50 GH₵ 3,067.5
GH₵ 5000 GH₵ 37.50 GH₵ 75.00 GH₵ 112.50 GH₵ 5,112.5
GH₵ 7000 GH₵ 52.50 GH₵ 105.00 GH₵ 157.50 GH₵ 7,157.5
GH₵ 9000 GH₵ 67.50 GH₵ 135.00 GH₵ 202.50 GH₵ 9,202.5
GH₵ 10,000 GH₵ 75.00 GH₵ 175.00 GH₵ 250.00 GH₵ 10,250.0

Meanwhile, according to the minister, electronic transactions in 2020 was estimated to be over GHS 500 billion compared to the GH¢78 billion in 2016.

A 1.5% elevy on all electronic transactions is estimated to be about GHS 6.9 billion, which is enough to cover for road deficit in the country.

People also ask:

The E-levy is applied to transactions including mobile money payments, bank transfers, and unregistered merchant payments. The E-levy is borne by the sender of transactions and is waived for transactions that amount to GH¢100 ($13) or less in a day.
On the 1st May 2022, the Ghanaian government implemented a 1.5% “E-Levy” (Electronic Levy) that will be applied to mobile money transactions and bank transfers within Ghana.
Electronic Transaction Levy (commonly known as Electronic Levy or E-levy) is a tax applied on transactions made on electronic or digital platforms.
Transactions such as bank deposits and withdrawals, mobile money Cash-in and Cash-outs, etc. are excluded from the Levy.
kwaku Amenorhu
Author: kwaku Amenorhu

Amenorhu kwaku is an author, internet marketer and entrepreneur. He is the founder of SuccessValley, a network community for students and aspiring entrepreneurs