How To Calculate E Levy Tax in Ghana

How To Calculate E Levy Tax in Ghana

This article seeks to clarify things and give details on How To Calculate E Levy Tax in Ghana. This will help most people better understand how and why they are charged for some of the transactions they may be taxed on.

About How To Calculate E Levy Tax in Ghana

The E Levy tax and it’s charges in Ghana for a while now, has been the subject of much discussion especially with regards to mobile money transactions and services.

Peehaps, many say, it’s because it’s a system which has been newly implemented so we will eventually get acclimatized. Also, others say it’s because the standard of living and hardships are rising fast. This discussion keeps going on and on.

Before we get to understand how to calculate the tax, it is recommended we know the kind of transactions which fall under the E levy and the ones which do not fall under it.

What transactions fall under the E-Levy?

  • Mobile money transfers done between wallets on the same electronic money issuer – For example sending money from your MTN Momo wallet to another person’s MTN Momo wallet.
  • Transfers from a wallet on one electronic money issuer to a recipient on another electronic money issuer – For example sending money from your Vodafone Cash wallet to another person’s AirtelTigo wallet.
  • Transfers from bank accounts to mobile money wallets: For example, Kofi transfers money from his CBG bank account to Ama’s G-Money wallet.
  • Transfers from mobile money wallets to bank accounts: For example, Esi transfers money from her Zeepay wallet to Yayra’s bank account.
  • Bank transfers on an instant pay digital platform or application which originates from a bank account belonging to an individual: For example, Kwame transferring money from his ADB account using the ADB app to Akua’s National Investment Bank account.

Transactions that do not fall under the E-levy

  1. Transfers of GHC100 by the same person on a daily basis.
  2. Transfers from one person’s account to another
  3. Transfers to the Ghana.gov portal for the payment of taxes, fees, and charges
    Cheques are cleared electronically.
  4. Payments to specific merchants (that is, payments to commercial establishments registered with the GRA for income tax and VAT purposes)
  5. Transfers between the accounts of the principal, master agent, and agent
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How are E Levy Charges Deducted in Ghana?

  • The Ghana Revenue Authority (GRA) is the body responsible for collecting and accounting for the Levy through mobile money providers, banks, and other financial institutions.
  • The E-Levy tax is charged when a person transfers money electronically. This way, the charging entity will add the Levy to the transfer amount and charge the person’s wallet or bank account.
  • The rate for the E-Levy is 1.50% of the value of the electronic transfer
  • Telecommunications Providers also charge 0.75% for their services on transactions.

Check: 

How To Calculate E Levy Tax in Ghana

The E Levy tax requires 1.5% deduction from electronic transactions. The E Levy Tax charge can be calculated either by using the E Levy calculator or by calculating with a mathematical formula.

How To Calculate E Levy Tax in Ghana Using the E Levy Calculator

The E Levy Calculator

  • On the calculator page, enter the amount you want to send or calculate in the first field tagged “You want to send”.
  • Immediately in the second field below, the calculator will calculate for you the amount of money you will pay as tax and the amount you will pay in total.

How To Calculate the E Levy Tax in Ghana with a Mathematical Formula

Formula for Calculating E Levy Tax

Formula for Calculating E Levy Tax

Formula for Calculating Telco Charge (0.75%)

Formula for Calculating Telco

Why are the E Levy Charges Confusing at times?

Due to the GHC 100 waiver of the E-Levy tax in transactions, the different ways of deductions have become quite confusing to certain people to some extent where it has to be clarified.

Understand How the Charges on E-Levy is Calculated 

Few days after the implementation of the tax, the following has been noticed:

  1. E-Levy Charges before sending GHC 100
  2. E-Levy Charges after sending GHC 100
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E-Levy Charges before sending GHC 100

E-Levy Charges before sending GHC 100

The charges shown in the image above explains how the tax will be deducted from transactions when the sender has not yet sent money up to GHC 100 in a day.

For example:

Kofi transferring money from his Mobile Money wallet to Ama’s Mobile Money wallet when he has not yet sent money to anyone yet that day.

Sending GHȻ 100 or below

  • If Kofi decides to send GHȻ 50, he will not be paying any e-levy tax. As well he will not pay telco charges, so he sends the money free of charge.
  • If he decides to send GHȻ 100, he will he will not be paying any e-levy tax. As well he will not pay telco charges, so he sends the money free of charge.

Sending above GHȻ 100

  • If kofi decides to send GHȻ 150, he will then be taxed for only GHȻ 50 and not GHȻ 150 because GHȻ 100 tax will be waived. He will also be charged 0.75% on the GHȻ 150 as telco charge. In total, he is charged GHȻ 0.75 for tax and GHȻ  1.33 as telco charge making a total of GHȻ 1.88.
  • If decides to send GHȻ 300, he will then be taxed for only GHȻ 200 and not GHȻ 300 because GHȻ 100 will be waived. He will also be charged 0.75% on the GHȻ 300 as telco charge. In total, he is charged GHȻ 3.00 for tax and GHȻ  2.25 as telco charge making a total of GHȻ 5.25.

E-Levy Charges after sending GHC 100

E-Levy Charges after sending GHC 100

The charges shown in the image above explains how the tax will be deducted from transactions when the sender has already sent money up to GHC 100 in a day.

Check: 

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For Example:

Kofi, after transferring GHȻ 100 from his Mobile Money wallet to Ama’s Mobile Money wallet, he then decides to send another money to Adwoa.

  • If Kofi decides to send GHȻ 50 this time, he will pay e-levy tax (1.5%) on the GHȻ 50 and also pay Telco charge (0.75%) on the GHȻ 50 as well. In total, he is charged GHȻ 0.75 for e-levy tax and GHȻ  0.38 as telco charge making a total of GHȻ 1.13 as charges on the GHȻ 50 transferred.
  • If he decides to send GHȻ 100 this time, he will pay e-levy tax (1.5%) on the GHȻ 100 and also pay Telco charge (0.75%) on the GHȻ 100 as well. In total, he is charged GHȻ 1.50 for e-levy tax and GHȻ  0.75 as telco charge making a total of GHȻ 2.25 as charges on the GHȻ 10 transferred.
  • If Kofi decides to send GHȻ 300 this time, he will pay e-levy tax (1.5%) on the GHȻ 300 and also pay Telco charge (0.75%) on the GHȻ 300 as well. In total, he is charged GHȻ 4.50 for e-levy tax and GHȻ  2.25 as telco charge making a total of GHȻ 6.75 as charges on the GHȻ 30 transferred.

Conclusion

By now, I believe you now understand How To Calculate E Levy Tax in Ghana and the few details that goes into the calculations. If you found this article informative, kindly share this to help educate others. You can feel free to comment your questions for answers.

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