Taxing MoMo merchants is ill-conceived and retrogressive

Former Chairman of the Public Interest and Accountability Committee (PIAC), Dr Steve Manteaw has said the decision to expand the E-levy coverage to include vendor transactions is ill-conceived.

According to Dr Steve Manteaw, the decision “will erode patronage and kill momo businesses”.

The policy analyst who doubles as a communication strategist on June 30, 2022, in a Facebook post argued that “In economics, we always operate on the assumption that, human beings are rational, and will change their consumption pattern based on the prevailing circumstances”.

His remarks come after the Ghana Revenue Authority (GRA) indicated in a statement issued on June 22, 2022, that “beginning Friday, July 1, 2022, users of mobile money will be required to pay a 1.5 per cent on deposits, sending, and all other mobile money transactions”.

Thus Merchants/Momo Agents will now be charged 1.5 per cent on all transactions. According to GRA, the decision to impose the 1.5 per cent electronic tax on MoMo merchant transactions forms part of the second phase of the E-levy implementation.

This does not come as a surprise because on May 11, 2022, a group calling itself “The Mobile Money Agents Association of Ghana (MMAAG)” visited the president of the Republic of Ghana and pledged their support for the E-levy implementation.

The association said it “considered the payment of taxes as a major tool to drive the needed development and progress of any country and would thus collaborate with the government to boost the uptakes from the E-levy.”