Embrace opportunities that come with digitalization – Bawumia at banks conference

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Vice President Dr Mahamudu Bawumia has urged African countries and all banks on the continent to embrace digital technology in order to take advantage from the enormous benefits therein.

Speaking during the 25th National Banking conference on the theme “the digital economy of Ghana the strategic role of the banking industry” on Thursday  November 18, he said “Countries under the free trade area in Africa must embrace all the opportunities brought by digitalization. This will alleviate the poverty levels within the region.

“Banks will benefit from a larger market  share. Cross border trading financing arrangement under the AfCFTA can increase the profitability of the banks, expand their asset base.”

For her part, President of the Ghana Bankers Association, Madam Patricia Sappor revealed that the value of mobile money transactions for the first four months of this year totaled ¢301.1billion whiles that of cheque transaction over the same period amounted to ¢68.3bn.

She indicated that if this trend persists, the total value of mobile money transactions will surpass cheque transactions by far more than 389bn  recorded for the whole year of 2020.

She said “The value of mobile money transactions for the first four months of this year totaled 301.1billion whiles that of cheque transaction over the same period amounted to 68.3bn.

“If the trend continues which I believe will, the total value of mobile money transactions will surpass cheque transactions by far more than 389bn  recorded for the whole year of 2020.

Her comments come at a time the government has inr6duced tax on mobile money transaction in the bduegt statement for he 2022 fiscal year.

The Finance Minister Ken Ofori-Atta announced a new levy to be charged by government in 2022 on all electronic transactions to widen the tax net and rope in the informal sector.

“It is becoming clear there exists enormous potential to increase tax revenues by bringing into the tax bracket, transactions that could be best defined as being undertaken in the ‘informal economy’,” Mr Ofori-Atta observed on Wednesday, November 17 as he presented the 2022 budget statement in Parliament.

“After considerable deliberations, government has decided to place a levy on all electronic transactions to widen the tax net and rope in the informal sector. This shall be known as the ‘Electronic Transaction Levy or E-Levy’.”

He explained that the new E-levy will be a 1.75 per cent charge on all electronic transactions covering mobile money payments, bank transfers, merchant payments and inward remittances to be borne by the sender except inward remittances, which will be borne by the recipient.

This will, however, not affect transactions that add up to GH¢100 pr less per day.

“A portion of the proceeds from the E-Levy will be used to support entrepreneurship, youth employment, cyber security, digital and road infrastructure among others.”

This new levy is scheduled to start Saturday, January 1, 2022.

In 2020, total value of transactions was estimated to be over GH¢500 million with mobile money subscribers and users growing by 16 percent in 2019.

According to a Bank of Ghana report, Ghana saw an increase of over 120 percent in the value of digital transactions between February 2020 and February 2021 compared to 44 percent for the period February 2019 to February 2020 due to the convenience they offer.

This was definitely heightened by the advent of Covid-19 especially during the lockdown.

By Laud Nartey|3news.com|Ghana