The implementation of the 1.5 percent electronic transaction levy popularly known as the E-levy is stifling the emerging e-commerce industry, and digital finance ecosystem, the E-Commerce Association of Ghana (eCAG) has said.
The association wants the government to consider the 1.5 percent E-levy on their activities.
The 1.5 percent E-levy on mobile money, online shopping, and other digital transactions, according to the E-Commerce Association of Ghana, is eroding gains made in building a buoyant e-commerce industry, financial inclusion, and a digitalized economy.
The association said the E-levy has increased the cost of doing business among its members, pushing operators in the E-commerce sector to consider relocating to other West African countries with favourable tax regimes.
According to the Executive Director of the E-Commerce Association of Ghana, Paul Asinor, “We do not want an instance where the government will keep increasing the E-levy and see it as an easy way to increase revenue. We want to stop it now in the budget because it will affect our business. If the cost of doing business continues to increase, businesses will gradually reduce their investment and look outside where operations are less costly.”
He appealed to the government to engage members in the sector before reviewing the impact of e-levy in the mid-year budget presentation.
He expressed worry that the Ministry of Finance did not engage key stakeholders in the e-commerce sector before introducing a sensitive tax policy such as the E-levy.
“We actually think that government must engage us to discuss a number of issues affecting the sector. This e-commerce sector is a vibrant area that can fetch the government a lot of income if activities in the areas are streamlined,” he said to Joy News.
He stated that they will be made expensive; which will discourage people from using digital and online payment platforms.
He indicated that there should be a national policy that will build the e-commerce sector to rake in the needed revenue for the government.
“That perception is a myth because online businesses are easily monitored and made to pay taxes. I have just told you about e-levy and how it affects our business.
“We are aware of the low incomes that online workers receive, and so we are engaging the relevant stakeholders. We will finalize our recommendations soon for government to consider in designing a sustainable policy,” he stressed.