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Impact of the 1.5 percent tax on electronic transactions (E-levy) on Ghanaians and coping strategies

Ghana has recently deepened its commitment to promoting digital financial services by developing and taking steps to implement various policies. Some current policies or national plans on digital financial services include the National Financial Inclusion and Development Strategy (2017-2023), the Digital Financial Ser vices Policy, the Cash-Lite Roadmap, and the National Payment Systems Strategic Plan (2019-2024). As a developing country with high tax potential but low tax revenues, there are increasing calls for the government to broaden the tax net, remove nuisance taxes and improve its tax effort using tools such as digital financial technologies. Despite the relevance of digital financial services specifically mobile money for financial inclusion and development, the government took an unpopular policy decision to introduce a new 1.5% tax handle on mobile money transfers, remittance transactions and bank transfers. Unlike the policies mentioned above, which were built on rigorous nationwide data collection, stake holder and public engagements with technical support from the international community, the e-levy was introduced without any clear whitepaper or little empirical analysis. Since its introduction on 1 May 2022, there has been limited research on the impact of the 1.5% tax on electronic transactions (“e-levy”) and the coping strategies being adopted by Ghanaians. We fill this void with a first-of-a-kind survey that assesses attitudes to the e-levy. We hope this study will shape the policy debate on the e-levy and broader digital financial inclusion policies of the government. Specifically, the study aims to address the following questions:

  • What are the perspectives of Ghanaians on the introduction of the e-levy?
  • What is the impact of the e-levy on the use of digital financial services in Ghana?
  • What are the coping strategies for using digital financial services after implementing the e-levy in Ghana?

This study adopts a quantitative survey study de sign. The questionnaire was administered within a two-and-a-half-week window from 31 May 2022 to 17 June 2022. A total of 1,677 respondents filled out the close-ended questionnaire, translating into a margin of error of ±2 percentage points at a 95% confidence level for Ghana’s population of 31 million. This means that it ensures a wide variability of our sample. Thus, insights and inferences will be relevant for shaping national policy.


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