Adoption of E-Levy as a Broad Aggregate Tax Policy on “MoMo” in Ghana: A Paper Review

Abstract

The evolution of digital payment platform especially Mobile Money (MoMo) has promoted economy growth and entrepreneurship in Ghana specifically on-line trading. The Central Bank in its effort to promote a cashless economy is in jeopardy through the introduction of E-levy as an aggregated tax in its attempt to widen the tax net for the informal sector (SMEs and the poor). This paper reviews the adoption of E-Levy as an aggregated tax to answer the following questions; Firstly, what is the effect of the E-Levy as an aggregate tax on MoMo transactions? Secondly, what is the penetration level of the E-Levy among the untaxed? Finally, is the E-Levy tax a political tool to generate revenue? The study was based on the Technology Acceptance Model (TAM) theoretical framework which also draws in some aspects of societal acceptance with data from BoG and ISSER. The findings indicated that inherent attitude, social construct, social compliance and acceptance of subscribers (taxpayers) plays a pivotal role to determine subscribers’ intention to pay the E-Levy. This review paper finding indicates that, policy makers should drive the taxation agenda based on; 1. The E-Levy policy should be reformed based on empirical evidence; 2. Alternative innovative approach should be employed to generate revenue from the high earners in the informal sector without adversely affecting the pro-poor; 3. The threshold of E-Levy should be adjusted to incorporate inflation going forward. The study offers policy makers valuable insight into the acceptance and sustainability of E-Levy as an aggregate tax.

Keywords: E-Levy; MoMo; Satisfaction; Technology Acceptance Model; Aggregated Tax; Telcos

DOI: 10.7176/RJFA/16-2-02

Publication date: February 28^th 2025