Ghanaians will wake up tomorrow to a new era where the monies they transfer online and on mobile will attract a tax of 1.5% once they exceed a daily cap of GHS 100 ($13) in cumulative payments.
Because of widespread disaffection about the way the government has gone about imposing this tax, riding roughshod over many important stakeholders to bulldoze it through, it has had to make last-minute concessions in an attempt to blunt some of the anger. These concessions were mainly in the form of “exemptions”.
Payments made to a range of recipients, for a variety of purposes, and to a sender’s own accounts and/or wallets, regardless of where they are held, were exempted from the e-levy.
To enable these cross-network, industry-wide, exemption rules and processes to take effect, there was a need for some kind of central catalog of APIs and services for the nearly 400 financial services operators allowed to charge the tax to uniformly adopt for consistency.
The industry proposed a clear set of specifications that they could implement on their own and suggested the creation of a set of APIs operated by a national payments switch, such as the GhIPPS. Other commentators warned about the complexity of developing cross-network, industry-wide, charging rules to deliver fully on the exemptions. Characteristic of the government’s current attitude to stakeholders, all these warnings and admonitions were ignored.
The Ghana Revenue Authority (GRA) insisted that it had developed a solution called ELMAS that could centrally manage all these ad hoc and constantly evolving rules (example: a cumulative exemption cap of GHS 20,000 was abruptly added for corporate banking transactions). It strenuously denied that any private contractors were involved at state cost.
It was eventually discovered that not only was the ELMAS shrouded in opacity, but it was also steeped in confusion and lack of candour. Industry players insist that they detected the involvement of shady and conflicted private contractors behind the GRA front presented throughout the attempts to build the industry-wide charging and exemptions framework. “Conflicted” in the sense that the ELMAS was also pitched as a monitoring system. How then can contractors known to be active players in the industry be brought in stealthily as referees and traffic conductors were it not for cronyism and other self-serving interests?
Whatever be the motivation of the government agencies, the poor design of the whole e-levy; refusal to heed industry advice and the inputs of well-meaning critics; the unrealistic timelines; and the failure to create a truly above-board and professional framework, have all led to a situation where several critical exemptions shall not work smoothly come tomorrow.
Instead of an industry-wide framework, individual financial services operators will use their internal billing systems to apply the tax and any applicable exemptions only within the confines of their own network. Cross-operator exemptions shall be constrained.
The government’s bid to prevent mass defections from electronic payments and a reversion to cash, which would undermine both the revenue objectives of the tax and Ghana’s budding digital economy, is now under threat.
Such a sad spectacle would have been averted if good faith consultations with all relevant stakeholders had been undertaken. Instead, opacity, favouritism, aloofness and lack of candour and transparency, have once again been allowed to derail the reputation of Ghanaian government agencies for professional and effective policy design and implementation.