We have seen good momentum on MoMo platforms following e-levy reduction – MTN CEO

The appetite for mobile money (MoMo) platform among subscribers has surged following the reduction of the electronic levy (E-levy) from 1.5percent to 1percent, CEO of telecommunication giants MTN, Selorm Adadevoh has said.

Government introduced the levy on all electronic transactions including on mobile money payments, bank transfers and merchant payments last year to widen the tax net.

Speaking at the 2023 MTN Media and Stakeholder Forum in Accra on Thursday, Mr.Adadevoh said “E-levy reduction has boosted confidence in Momo. We have seen good momentum and are quite excited about it.

The E-levy has been reduced from 1.50% to 1% of the value of the electronic transfers. This was given effect to by the passage of the Electronic Transfer Levy (amendment) Act, 2022. Act 1089.

This is in addition to applicable charges. In the case of Person-to-person (P2P) transfer above GHS100, MTN charges will still be at a discounted rate of 0.75% for transfers between wallets on both the MTN Mobile Money Platform (On-net) and through the interoperability (Off-net).

P2P transfers of up to GHS100 daily on MTN Mobile Money Platform (On-net) are free of charge. A cap of GHS7.5 applies to all transfers above GHS1000 that is initiated on the MTN Mobile Money Platform.

The levy which was introduced in the 2022 budget has not yielded the resources as expected. The introduction of the electronic levy was to help the government mobilise domestic revenue.

The government reduced expectations for revenue collection from the levy after an initial projection of GHS 7bn.

In July 2022, projections were reduced by about ten-fold to GHS 611m. The levy faced stiff opposition from the Minority in Parliament and was generally unpopular with Ghanaians.

This review is the second for the levy, after initially being pegged at 1.75 percent before the government reduced it in a compromise amid protests against it. The levy was eventually implemented in May 2022.

As mobile money taxes gain popularity across the continent, its design requires very careful consideration, analysts have suggested, with data suggesting that there are currently at least ten African countries that are either considering, or have implemented, a similar tax.

According to the Ghana Revenue Authority (GRA), the E-levy brought 328.80m as of September 2022. The country continues to witness a 20percent improvement in the collection of the levy on a month-month basis.

Data also shows that the new tax measure has performed much more poorly in revenue terms than the government had hoped for. In first 8 months of the levy’s introduction, it raised only 11% of its revenue target of US $1 billion.

This year’s MTN Media Forum was on the theme ‘leveraging technology to serve customers with excellence. The forum aims at sharing an overview of innovative solutions being churned out by MTN.

Source: norvanreports.com