Ghana’s government abolished the contentious 1% Electronic Transfer Levy (E-Levy) on mobile money transactions this week, with MTN Ghana confirming Thursday it halted deductions hours after President John Mahama signed the repeal into law.
The move, effective April 2, 2025, also nullifies a betting tax and emissions levy amid broader fiscal reforms.
MTN, which controls roughly 60% of Ghana’s mobile money market, notified customers Thursday that all peer-to-peer transfers via its MoMo platform no longer include the E-Levy charge. The decision follows months of public pressure over the tax, introduced in 2022 to widen revenue but criticized for stifling financial inclusion and digital payment growth.
CEO Stephen Blewett had cautioned earlier Wednesday that procedural delays were inevitable. “I can’t abolish E-Levy until I’m told to do it. If I act prematurely, the Bank of Ghana will penalize us,” he told reporters at MTN’s Accra headquarters, underscoring compliance protocols. The company adjusted its systems within 24 hours of the law’s enactment.
The E-Levy’s removal marks a policy reversal for Ghana’s government, which initially defended the tax as vital for debt reduction and infrastructure projects. It generated GH¢4.9 billion in 2023—30% below projections—as transaction volumes dipped 22% post-implementation, according to central bank data. Analysts argue the levy disproportionately affected low-income users reliant on mobile payments, with informal sector activity migrating back to cash.
“This repeal isn’t just about easing costs—it’s a corrective measure to restore confidence in digital finance,” said Accra-based economist Nana Ama Agyemang. “But the state must now address the revenue hole.” The government has not yet outlined alternatives to offset the estimated GH¢1.8 billion annual loss, though Finance Ministry sources hint at expanded property taxes and luxury goods tariffs in upcoming bills.
For MTN, the shift could reignite mobile money growth after two years of stagnation. Ghana’s MoMo transactions peaked at GH¢1.1 trillion in 2021 before the levy, contracting to GH¢978 billion by 2024. Rivals AirtelTigo and Vodafone Cash are expected to follow MTN’s lead by week’s end.
The repeal aligns with Mahama’s campaign pledge to “unburden the digital economy,” yet questions linger over fiscal sustainability. Ghana’s debt-to-GDP ratio remains near 85%, with IMF loan conditions requiring stricter revenue mobilization. While the E-Levy’s demise may spur short-term consumer relief, long-term trade-offs between public finance and economic accessibility loom large—a balancing act echoing debates from Kenya to Nigeria over taxing Africa’s booming fintech sector.
