MoMo Agents Call for E-Levy Education Against Panic Withdrawals

By on April 30, 2022 0

Agents who operate a mobile money business, also known as MoMo, are looking for solutions to minimize panic withdrawals during the implementation of the Electronic Transfer Levies Act of 2022 (Act 1075) which starts tomorrow.

Already, the agent network has successfully implemented an education campaign to roughly halve incidents of panic withdrawals since the law was passed.

However, agents are asking for logistical and financial support from the government and telecommunications companies (telcos) to intensify education and support efforts to reduce the “bank run” to the bare minimum.

The Mobile Money Agents Association of Ghana (MMAAG) on April 19, 2022 wrote to the Ministries of Finance, Information and Communications as well as the Ghana Revenue Authority (GRA), seeking an opportunity to engage and to explore various avenues that could drive positive education for harvesting.

Awareness and education

MMAAG General Secretary Evans Otumfuo in an interview with the Daily Graphic in Accra insisted that failure to keep up the education campaign across the country could lead to further withdrawals in the coming days.

He said the association, which has 150,000 members, out of an estimated 400,000 agent network nationwide, has the potential to partner with the government to provide needed public awareness and education.

“As agents, we deal with the public on a daily basis, so it will be effective for the government to engage us on how to promote mass education pending the implementation of the tax.

“We are ready to take responsibility and step up the national education campaign since it is through our company that the levy will be collected,” Otumfuo said.

He explained that the policy would mainly target the informal sector and if the challenge was low literacy then it was necessary to focus on client education as there was always the wrong impression that the tax would affect every mobile money transaction.

“There are some exemptions that the levy provides and if we don’t educate people, we might feel more panic if the implementation starts,” Otumfuo added.

The direct debit, its exemptions

Following the passage of the Electronic Transfer Tax Bill into law by Parliament on March 29 this year, which subsequently received Presidential assent, the GRA also announced that implementation would begin tomorrow.

The law imposed 1.50% on electronic transfers also known as E-Levy.

It will be charged on all transactions except cumulative transfers of GH¢100 per day by the same person, transfers between accounts belonging to the same person and payment of taxes, fees and charges on the system or any other payment system designated by the government.

Exemptions include specified merchant payments, transfers between principal, agent, and principal agent accounts, and electronic clearing.

Market visits

When the Daily Graphic team visited select markets with major mobile money providers such as Madina, Kaneshie, Adabraka, Makola and Abossey Okai in the Greater Accra region between 19th and 20th April this year , she observed low traffic on MoMo services.

Sellers argued that while withdrawals increased significantly, deposits fell to a record low.

It has also been observed that many general stores such as grocery stores, food (chop bar), fabric and spare parts dealers, who now use the MoMo service as a form of payment in their businesses, insist that charges are added by the customer. before accepting the transaction.

“If we say we won’t accept mobile money, shoppers leave, so we’ve introduced the service for those who don’t have physical money, but want to buy something.

“But we also ask them to add the charges and so far the buyers have not complained about that,” said a saleswoman at Abossey Okai, Nana Yaa Asantewaa.

Short-term setbacks

A tax policy specialist at Oxfam Ghana, Dr Alex Ampaabeng, said that in the short term, people would be taken back after the tax was implemented.

He said that in the long term, the convenience of using the technology would overcome the levy imposed on the electronic transaction.

“The levy at the moment has the advantage of working well due to a number of factors including rising fuel prices and terrible traffic conditions, especially in Accra,” Dr Ampaabeng said.

He noted that the levy would do well if the government provided periodic reports on the use of the funds raised through the levy.

“The government must undertake insurance training to explain that the funds to be raised from the levy will not be wasted but used for the benefit of the ordinary Ghanaian.

“Projects built with E-Levy funds should be tagged, which will encourage voluntary compliance and be a game-changer for other tax components,” Dr Ampaabeng added.