Introducing electronic transaction levy in Ghana: A possible curse or a blessing? The public’s perception

Abstract

This study seeks to determine Ghanaians’ perceptions of the new electronic transaction levy (E-levy) and the impact of their perception on their intention to use electronic transactions (ETs) that attract the levy, financial inclusion (FI) and financial well-being (FW). To achieve this, the study employs PLS-SEM with a sample size of 782. Generally, we found Ghanaians have limited knowledge on E-levy. Thus, Ghanaians should be re-educated about E-levy. We again document that the perception of Ghanaians towards E-levy is negative. Also, we found most Ghanaians intend to reduce their patronage of ETs that attract levy. Furthermore, Ghanaians’ perception of the E-levy reduces their intention to use ETs that are affected by the levy and, by extension, adversely affect FI and FW. Hence, based on the perception of Ghanaians, the E-levy introduced is a curse. We recommend that the government of Ghana review the E-levy policy to minimize its negative effects. We specifically suggest that government raise the GH¢100 per day transaction exemption threshold to increase the intention to use ETs and FI; moreover, government can exempt businesses that pay income tax from E-levy to reduce the tax burden on their income. Also, government should re-enlighten the public on the benefits of E-levy to the country, reassuring the public of accountability and honesty in implementing the E-levy policy to increase their intention to patronize ETs that attract levy. Again, we record a significant and positive total effect of FI on FW. Thus, additionally, government should introduce policies that ensure FI.