In this article, you will get to understand the means by which E-Levy charges are calculated and also deducted on mobile money transactions in Ghana. The Electronic Levy (E-Levy) has been passed and is currently underway. With this, Electronic transfers such as mobile money , bank to bank, bank to mobile money, and online payment transactions with payment platforms such as Visa Card, Master Card, and PayPal, among others, are subject to a 1.5 percent tax.
The purpose of this article is to clarify certain details in the heads of many who might find it difficult to understand some details related to the newly implemented tax especially with regards to how the tax is deducted on certain transactions.
Before we know how the charges are deducted, it is recommended we know the types of transactions which fall under the E levy and the ones which do not fall under it.
Commercial activities the fall under the E-Levy:
- Sending money from your MTN Momo wallet to another person’s MTN Momo wallet is an example of a mobile money transfer between wallets on the same electronic money provider.
- Sending money from your Vodafone Cash wallet to someone else’s AirtelTigo wallet is an example of a transfer from one MoMo service wallet to another.
- Transferring funds to mobile wallets from bank accounts: Kofi, for instance, moves money to Ama’s G-Money wallet from his CBG bank account.
- Money transfers between bank accounts and mobile money wallets: As an illustration, Esi moves funds from her Zeepay wallet to Yayra’s bank account.
- Bank transfers from an individual’s bank account to a digital platform or application for instant payment: Kwame, for instance, transferring money from his ADB account using the ADB app to Akua’s National Investment Bank account.
Transactions the E-levy Charges will not cover
- Transfers of GHC100 carried out daily by the same individual.
- Payments between individuals’ accounts
- Payment transfers to the Ghana.gov portal for taxes, fees, and levies
Electronic clearance of checks occurs. - Payments to particular merchants (i.e., payments to businesses that have registered as VAT and income tax payers with the GRA)
- Transactions involving the principal, master agent, and agent accounts
How are E Levy Charges Deducted?
- The E-Levy is deducted 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 amount you wish to move.
- Telecommunications Providers also take 0.75% for their services on transactions
Understand How the Charges on E-Levy Transactions are Deducted
Debit before sending GHC 100
The illustration above presents the deductions rom transactions when the sender has not yet sent money up to GHC 100 in a day.
For example:
On a day when he hasn’t sent money to anyone yet, he decides to move cash from his wallet to Ama’s.
Sending GHȻ 100 or below
- Kofi won’t have to pay any fee if he sends GHC 50. Additionally, he will not cover any other phone costs, thus he sends the money at no cost.
- Should he forward GHC 100, he will not be required to pay anything.
- If Kofi makes up his mind to send GHC 150, the GHC 100 tax will be waived, thus he will only be levied for GHC 50 instead of GHC 150. In addition, he will be assessed a 0.75% telecom charge on the GHC 150. He gets billed GHC 1.88 in total, with GHC 0.75 going toward taxes and GHC 1.33 going toward telecom charges.
- If he decides to send GHC 300, GHC 100 will be waived, thus he will only be taxed for GHC 200 and not GHC 300. Additionally, a telecom fee of 0.75% will be applied on the GHɻ 300. He is charged GHC 3.00 in total for taxes and GHC 2.25 for telecom charges, for a total of GHC 5.25.
Fee after sending GHC 100
The charges displayed 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 one day.
For Example:
Following the transfer of GHC $100 from his Mobile Money wallet to Ama’s wallet, Kofi chooses to send further funds to Adwoa:
- In the event that Kofi transfers GHC 50, he will also be taxed to Telco charge (0.75%) and e-levy (1.5%) on the GHC 50. He is assessed GHC 0.75 for the e-levy tax and GHC 0.38 for the telecom charge, for a total of GHC 1.13 in costs on the GHC 50 transmitted.
- In case he chooses to send GHC $100 this time, he will also be responsible for settling Telco charges (0.75%) and e-levy (1.5%) on the GHC $100.He is billed GHC 1.50 for the e-levy tax and GHC 0.75 for the telco charge, for a total of GHC 2.25 in charges on the GHC 100 sent.
- Should Kofi choose to send GHC 300 this time, he will also be responsible for paying the Telco fee (0.75%) and the e-levy (1.5%) on the GHC 300.He is charged GHC 2.25 for telco service and GHC 4.50 for e-levy tax, for a total of GHC 6.75 in charges on the GHC 300 sent.