This article seeks to clarify things and give details on how an ordinary Ghanaian can calculate the new E-Levy Tax. This will help most people better understand how and why they are charged for some of their transactions.
About E-Levy
The government of Ghana, rolled it out in 2022 in an attempt to raise revenue for the state. There has been a great deal of public discussion ans scrutiny since it’s introduction. People have talked about it so much because, they worry about how the tax could greatly affect their ability to tranact smoothly.
The aim of this charge according to the government, was to increase tax collection mostly in informal sectors, which often conduct business outside of established banking systems. Nonetheless, it faced resistance from a number of sources including citizens, political parties in opposition and civil society organizations.
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 that do no.
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 mobile money service to a recipient on another – 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
- Transfers of GHC100 by the same person on a daily basis.
- Sending cash from one person’s account to another
- Transmitting money to the Ghana.gov portal for the payment of taxes, fees, and charges
Cheques are cleared electronically. - Payments to specific merchants (that is, payments to commercial establishments registered with the GRA for income tax and VAT purposes)
- Transfers between the accounts of the principal, master agent, and agent
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 tax is charged when a person sends money electronically. This way, the charging entity will add the Levy to the amount being sent and charge the person’s wallet.
- 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
A 1.5% deduction is required from electronic transactions. The charge can be calculated either by using the E-Levy calculator or by calculating with a mathematical formula.
Using the E Levy Calculator
- Access the E Levy Calculator by clicking here
- 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 present you with the amount of money you have pay as tax and the amount you will pay in total.
How To Calculate with a Mathematical Formula
Formula for Calculating E Levy Tax
Formula for Calculating Telco Charge (0.75%)
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 To Calculate the Charges on E-Levy
Few days after the implementation of the tax, the following has been noticed:
- E-Levy Charges before sending GHC 100
- E-Levy Charges after sending GHC 100
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 MoMo wallet to Ama’s MoMo 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 fee. In addition, he will not pay telco charges, so he sends the money free of charge.
- If he decides to send GHȻ 100, he will not pay anything. Also, 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.
Fee 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.
For Example:
Kofi, after transferring GHȻ 100 to Ama, 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 levied GHȻ 0.75 and GHȻ 0.38 as telco charge making a total of GHȻ 1.13 as charges on the GHȻ 50 sent.
- 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 debited GHȻ 1.50 and GHȻ 0.75 as telco charge making a total of GHȻ 2.25 as charges on the GHȻ 10 sent.
- 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 taxed GHȻ 4.50 and GHȻ 2.25 as telco charge making a total of GHȻ 6.75 as charges on the GHȻ 30 transferred.
At this point, we believe you have understood the process involved and how well one can easily calculate for E Levy Tax on a transaction 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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