According to some of the traders who were interviewed at Madina, Mallam, and Kaneshie Markets, most customers would rather not purchase the item if they have to pay or top-up their cash with mobile money (MoMo), a situation that never existed prior to introduction of the E-levy.
This, some of the traders say, has disrupted trade flow; thereby slowing business and reducing their sales revenue.
“I sell cosmetics and I do MoMo transactions here in my shop. So if you buy from me, I accept MoMo as payment. But because of the E-levy many people have stopped buying with the mobile money, and this is affecting sales. So I advise them to cash out the money from me and pay with cash if they want,” one trader at Madina market, who prefers to be called Ama, told the B&FT in an interview.
Another trader, Johnson – a provision seller at Mallam Market, reiterated that the situation has affected trading as buyers are unwilling to pay with mobile money if they do not have sufficient cash on them.
“I do accept MoMo, but since the E-levy started some of my clients have refused to pay with MoMo. The few who pay with MoMo do so reluctantly because, sometimes, the cash on them is not enough to pay for the items they bought; but because they need it, they have to buy,” he said.
Some of the buyers who spoke to the B&FT confirmed what the traders said – saying they are not ready to bear the tax burden, hence their reluctance in using the mobile money platform.
At the Madina Market, a buyer, Evelyn Borson said: “I have lost the taste for making huge payments with MoMo, unless the amount is less. At least GH¢200 I can afford, but above that, please I will not”.
Abigail, who was at the Kaneshie Market to purchase some items said: “As for me, I don’t make any payment with MoMo when it exceeds GH₵100. Let’s say I’m paying for items worth GH₵150, I just find a MoMo stand, quickly withdraw the money and make my payment. Or I will pay half with MoMo and pay the rest with cash”.
For some of the traders, the disruption to business flow created by implementation of the E-levy has got them considering going in for merchant accounts, as the tax is not applied on such accounts.
A fabric-seller at Mallam Market, Mama Linda, said that she and some other wholesalers are going in for merchant accounts so they can pay their suppliers through MoMo without incurring the E-levy charges.
Even though the Electronic Transaction Levy (E-levy) only took effect this month, available data show that the mobile money platform has lost about GH¢10billion in value between November 2021 and January 2022 – a development that raises serious concerns about the new tax’s ability to rake in the anticipated revenue.
According to the Summary of Economic and Financial data (March 2022) published by the Bank of Ghana, the mobile money platform, which is the largest payment system network in the country – seen as the main driver of financial inclusion – saw its transaction value decline to GH¢76.2billion in January 2021 from the GH¢86.1billion recorded in November 2021 (the very month it was announced), indicating a drop of GH¢9.9billion. The platform has never seen such a colossal decline of value in the space of any two months within a year ever since it was introduced.
Besides the drop in value on the platform, the total number of transactions also went south as it saw a 24 million decline in January 2022 from November 2021. The number of active agents also saw a decline of 7,000 within the same period, while active mobile money accounts also decreased by 600,000 in the period under discussion.
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