There are six ways to reduce the impact of the Electronic Transaction Levy that are legally sound and above board
These six ways are informed by existing exemptions provided under the E-Levy law and some general transactions that the tax does not cover
Management and Tax Adviser, Fred Awuttey, has said while one of the ideas to beat the tax is good, it comes with the risk associated with carrying physical cash
While many are worried about the impact of the 1.5% E-Levy on their incomes, there are six ways to legally minimise the risk of paying the tax and reduce its impact.
The implementation of the much-talked-about E-Levy starts on May 1, 2022, but YEN.com.gh reached out to a tax expert for some brilliant ideas on how to navigate the choppy waters of the unpopular Electronic Transactions Levy.
These ideas to minimise the risk of paying the E-Levy use exemptions spelled out under the law and transactions that it does not cover.
1. Chase the chequebook Tax and Management Adviser at tax consulting firm, EM Tax Advisers Ltd, Fred Kwashie Awuttey, has said one of the easiest ways to reduce the E-Levy risks is to use cheques. Clearing cheques by electronic means is exempted from the E-Levy tax, so it provides an excellent alternative to deal with the charges associated with the E-Levy.
2. Do ‘physical’ cash-in and cash-out
The E-Levy does not cover cash-out and cash-in made at the momo vendor. So there is the option of going to a momo merchant and asking them to deposit money into a particular momo wallet.
When the person withdraws (cash-out), they only pay the momo charges, not E-Levy.
“But, with this option, a person must be guided by the dangers of carrying a lot of cash along,” Mr Awuttey warns.
3. Make payments through merchant shortcode (for shops and supermarkets)
The E-Levy does not cover payments made through a merchant’s shortcode registered with the Ghana Revenue Authority to pay income tax and VAT.
So to minimise your exposure to the E-Levy at a supermarket or shop, first make sure that they have a merchant shortcode registered to the GRA.
You have to determine if the vendor is registered with the GRA before initiating the transaction.
4. Update bank, momo account details with the Ghana Card
The Executive at EM Tax Advisers explains that the E-Levy does not cover transfers between two or more accounts held by one person with a unique Ghana Card ID number.
“So to minimise the impact, individuals must update their bank accounts and mobile money accounts with the Ghana Card. This way,
they will not be affected by the tax when they transfer money from one account; say from their Vodafone wallet to their MTN wallet,” Mr Awuttey has advised.
5. Regulate the volume of electronic payments at the bank
People making payments by an electronic platform through the bank may have to regulate the payment to minimise the impact of the new levy.
The Finance Minister is expected to set a minimum threshold on the bank payment that the levy will cover.
Once that is determined, individuals must regulate their payments to prevent the E-Levy from kicking in.
6. Pay your taxes through the Ghana.gov platform
To avoid paying E-Levy while paying other taxes, do it through the Ghana.gov platform.
The tax expert explains that that platform is exempt from charging the E-Levy.
Source: YEN.com.gh | George Nyavor