Festus E. TURKSON, Peter QUARTEY, Agyapomaa GYEKE-DAKO, Priscilla Twumasi BAFFUOR, Emmanuel ADU-DANSO, Emmanuel ABBEY
Abstract
The introduction of Ghana's Electronic Transactions Levy (E-Levy) aimed to enhance domestic tax mobilization and expand the country’s tax base. This policy brief presents findings from a study that investigated the impact of the E-Levy on retail Digital Financial Services (DFS) in Ghana, with a particular focus on mobile money agents and small-scale non-bank financial institutions.
Employing a mixed-methods approach that combined quantitative and qualitative research, the study uncovered a notable decline in customer base and average turnover following the levy’s implementation. However, by early 2023, there was a recovery in these metrics. The research also highlighted that existing tax rates, policies, and administrative challenges continue to impede the broader use of DFS. Nevertheless, the reduction of the initial levy rate from 1.5% to 1% has led to a gradual improvement in service usage.
The study recommends regular reviews of the levy, comprehensive public education on taxation, and a focus on financial inclusion by policymakers to alleviate the burden on vulnerable populations.
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