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3 reasons why the MoMo tax is a dangerous tax, and likely to be withdrawn.

The more one ponders, analysis and dissects the newly proposed electronic transaction levy (E-levy), the more it sounds irrational, to even the lay man on the street, who does not know anything about taxation or economics.

Obviously, the government, and whoever proposed this tax, might have employed a shallow scholarship towards conceiving the idea. 

Firstly, the tax has a potential of becoming an illegality. It is trite knowledge that, you never tax an income twice. However, this particular lazy way of revenue mobilization is about to do just that. 

For instance, if a worker takes his salary, which has already been taxed through income taxation, and decides to transfer the salary to his mobile money wallet, this be 1.75% charge licks the money again. 

Again, should this worker pays for a service through mobile money (Momo), the same money gets taxed again. 

This is a reality, and no amount of rationalization can justify such blatant robbery. 

Secondly, the rate is too much. 1.75% of the total value of any amount more than 100ghc you transfer is beyond the economic strength of most Ghanaians. 

Currently, the telcos, who are the service providers and the Momo vendors share only 1% of any amount beyond 100ghc, that is even on MTN. 

Now, government, which is a third party, is coming for a whopping 1.75%. Ridiculous. 

Third. Transferring money manually by cash will be less cheap than transfers. The business community will drift towards cash transaction to avoid this tax, thereby killing the cashless and digitalization agenda this same government is driving. 

For this and more, many have envisaged a likely withdrawal and backtracking of this killer tax. 

It is most likely not to survive at the end of the day due to its lack of sound economic value.

Content created and supplied by: Rasgambo1 (via Opera News )



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