The E-levy and Merchant Payment Exemption in Ghana
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Research in Brief 112
Mobile money-enabled digital merchant payments have significant promise for enhancing tax compliance in lowincome countries, and addressing persistent challenges. First, digital merchant payments offered by mobile money providers guarantee greater accessibility to safer and faster formal payment. Second, they help businesses to keep comprehensive records of their activities, expenses, and receipts – enhancing accuracy of tax filing, and perceptions of the tax administration’s monitoring and enforcement capabilities. Third, they improve businesses’ perceptions of the transparency and predictability of the tax system, by using more precise digital information for tax calculations.
In addition, governments can use digital merchant payments to encourage business formalisation, by exempting them from new taxes on mobile money transactions. Many African governments use this strategy, while taxing other transaction types – such as mobile money withdrawals and person-to-person transfers.
Celeste Scarpini is a Research Officer at the ICTD, and a PhD student at the Department of Economics, University of Sussex. Her main research interests relate to tax administration in sub-Saharan Africa, from technology adoption to data management and revenue collection strategies.
Fabrizio is a Research Fellow at the Institute of Development Studies, and the Research Lead for the second component of the ICTD's DIGITAX Research Programme. His main research interests relate to governance, public finance, and taxation, with a strong focus on impact evaluation methodologies and statistical analysis. He holds a PhD in Economics from the University of Sussex.
Mary Abounabhan is a Research Officer for the DIGITAX programme. Her research focuses on the the appropriateness and effectiveness of digital financial services taxes and their development impacts. She has completed her Masters of Globalisation, Business, and Development at the Institute of Development Studies, focusing her research on the Moral Economy of social media taxation in Lebanon.
Awa is a Postdoctoral Researcher at the ICTD and an economist specialising in public finance in developing and transition countries. She holds a doctorate from the Université Clermont Auvergne in France, and the Initiative Prospective Agricole et Rurale (IPAR), a think tank based in Senegal.
Citation: Scarpini, C.; Santoro, F.; Abounabhan, M. and Diouf, A. (2024) The E-levy and Merchant Payment Exemption in Ghana, ICTD Research in Brief 112, Brighton: Institute of Development Studies, DOI: 10.19088/ICTD.2024.036
