Electronic Transfer Levy (E-Levy) Abolition: A New Opportunity for Individuals and Businesses

Introduction

The Electronic Transfer Levy (E-Levy) was introduced by the Government of Ghana on 17th November 2021 as a tax on digital financial transactions. Initially proposed at 1.75%, the final rate was pegged at 1% through the passage of the Electronic Transfer Levy Act, 2022 (Act 1075) and its amendment, Act 1089. The levy, administered by the Ghana Revenue Authority (GRA), applied to a range of electronic transactions including:

·        Mobile money transfers between accounts on the same or different electronic money issuers.

·        Transfers between bank accounts and mobile money wallets.

·        Instant bank transfers through digital platforms or applications, originating from an individual’s account (subject to a daily threshold).

Following the 2024 General Elections, the new government officially abolished the E-Levy as part of its campaign promise. Effective midnight on 2nd April 2025, the Ghana Revenue Authority directed all entities to cease applying the levy. All deductions made after 2nd April 2025 are to be refunded, while those made before the cutoff must be filed accordingly.

What This Means for Individuals

1. Increased Disposable Income. With the 1% levy scrapped, mobile money users no longer bear this extra cost. This translates to more money in your pocket—funds that can now be spent, saved, or invested.
2. Reduced Cost of Financial Transactions. The removal of the levy significantly lowers the cost of digital transactions. This is especially beneficial for low-income earners, encouraging continued usage of mobile money services without the burden of additional charges.
3. Improved Financial Inclusion. The abolition of the E-Levy is expected to boost confidence in digital finance, promoting wider adoption of digital platforms and enhancing financial inclusion and economic participation, particularly among the unbanked population.

Business Benefits of the Abolition

1. Improved Cash Flow. For businesses, especially micro, small, and medium enterprises (MSMEs), the scrapping of the 1% levy translates to enhanced liquidity. This can facilitate better management of short-term obligations such as accounts payable, receivables, and inventory. With increased funds, businesses can now consider new investments or expansion plans.
2. Streamlined Financial Transactions. The removal of E-Levy encourages the use of digital payment systems, helping businesses reduce cash-handling risks and operational costs. It also supports better financial record-keeping and documentation, which is crucial for growth and compliance.
3. Business Expansion Opportunities. Improved cash availability provides room for long-term business growth, including scaling operations, entering new markets, or investing in equipment and staff.

Conclusion

The repeal of the E-Levy marks a positive shift for both individuals and businesses in Ghana. Individuals now have greater spending power, which can be directed toward healthcare, education, daily needs, or savings. Businesses stand to gain through improved cash flow, lower transaction costs, and expansion opportunities.

As Accountants, we must guide our clients, both individual and corporate, to strategically leverage this change to maximize financial gains and drive sustainable growth.