Silver bullet or fool’s gold? Ghana’s e-tax marred by scepticism

Silver bullet or fool’s gold? Ghana’s e-tax marred by scepticism

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Everything changed for Ghanaian storekeeper Isaac Siaw when his telecoms provider launched mobile payments for business in 2017.

Sales boomed at his 20-year-old store, as customers no longer had to pay cash for household goods that include mosquito repellent, batteries, razors, soap and superglue.

But as parliament considers a new 1.75% tax on electronic payments, known as the 'e-levy', Siaw said he may return to cash full-time.

Finance Minister Ken Ofori-Atta proposed the e-levy in November to widen the tax net, but opposition was so fierce that it caused a brawl in parliament a month later, and it failed to pass.

The government plans to resubmit the bill next week and try to fast-track it. Lawmakers will recess on April 15, closing the window for its passage if it is not voted on before then.

The tax, which would cover mobile money payments, bank transfers, merchant payments, and inward remittances, could raise up to 6.9 billion Ghanaian cedi ($926 million) in 2022, according to official estimates.

But Ghana's $50.8 billion public debt is unlikely to drop significantly.

"We have prices of goods going up each and every day," Siaw said. "If a customer must pay a higher price for a commodity, then after paying that high price