Approximately one million mobile money accounts in Ghana fell into a state of inactivity following the implementation of the Electronic Transfer Levy in May 2022, according to research conducted by the Institute of Statistical, Social and Economic Research (ISSER). This stark reduction took the total count from 19.1 million to 18.1 million by July 2022.
Despite the initial setback, ISSER’s review of the situation revealed that the number of registered and active mobile money accounts and agents demonstrated a consistent upward trajectory by January 2023. However, a slight setback occurred in February 2023, resulting in a decrease of 100,000 active accounts.
During the period between March and April 2022, the total number of mobile money transactions witnessed a decline of 10 million, coupled with a ¢2.8 billion reduction in total transaction value. This trend continued into the subsequent months, with an even more substantial decrease. Between April and May 2022, the total number of mobile money transactions fell by 21 million, and the total value decreased by ¢16.3 billion.
The study pointed out that Ghanaians swiftly shifted to alternative payment systems in response to the introduction of the E-Levy. Interestingly, the tax initially realized less than 7% of its target revenue, amounting to only ¢93 million out of the expected GH¢1.4 billion.
Moreover, the announcement of the E-Levy prompted an uptick in the usage of alternate payment systems, such as GHIPPS instant pay, cleared cheques, and internet banking. After a revision of the E-Levy rate to 1%, ISSER reported a decrease in the utilization of these alternate systems. However, the effect of this revision proved to be short-lived, as figures rebounded in February 2023.
In its conclusion, ISSER noted that the E-Levy fell short of its anticipated revenue targets. It emphasized the critical role of the tax rate, highlighting that even marginal reductions, such as 0.5%, can make a significant difference in the acceptance or rejection of a tax policy by stakeholders.