Parliament has approved a bill to repeal the Electronic Transfer Levy (E-Levy), marking a significant policy shift aimed at reducing the tax burden on Ghanaians.

The bill, passed on Wednesday, March 26, will now be sent to President John Dramani Mahama for his assent.

The E-Levy, introduced in 2022 under the previous New Patriotic Party (NPP) administration, imposed a 1.5% tax on electronic transactions, including mobile money transfers, bank transactions, and online payments.

Although it was later reduced to 1%, the levy remained unpopular, drawing criticism from businesses, consumers, and political stakeholders who argued that it stifled digital transactions and disproportionately affected low-income earners.

The decision to scrap the tax aligns with the Mahama administration’s broader agenda to eliminate what it describes as "nuisance taxes" imposed under the former government. During the presentation of the 2025 Budget Statement on March 11, Finance Minister Dr. Cassiel Ato Forson announced the government’s commitment to repealing multiple levies to ease financial pressures on businesses and households.

“Mr. Speaker, we will abolish the 10% withholding tax on winnings from lotteries, otherwise known as the ‘betting tax.’ We will abolish the Electronic Transfer Levy (E-Levy) of 1%. We will abolish the emission levy on industries and vehicles. We will abolish the VAT on motor vehicle insurance policies. And we will abolish the 1.5% withholding tax on the sale of unprocessed gold by small-scale miners,” he stated.

With Parliament’s approval of the repeal, the E-Levy joins a list of taxes that are set to be abolished once the 2025 budget is fully implemented. Other levies to be scrapped include the COVID-19 Health Recovery Levy, the betting tax, and VAT on motor insurance policies.

While the repeal has been widely welcomed, some economic analysts have raised concerns about the potential revenue gap it could create. The government has assured the public that measures are being put in place to address any shortfall, including adjustments to the tax refund ceiling and improved revenue collection strategies.

Government data shows that as of the end of 2024, revenue from the COVID-19 Health Recovery Levy stood at approximately GH¢6.4 billion, while the E-Levy generated GH¢246.9 million. Despite the removal of these taxes, the Mahama-led administration maintains that its new tax policy will support economic recovery without placing excessive financial pressure on Ghanaians.