The Ministry of Finance, on behalf of the Government, is actively pursuing a comprehensive overhaul of the contentious Electronic Transfer Levy (E-Levy). This initiative aligns with the Government’s Medium-Term Revenue Strategy, aimed at enhancing the effectiveness and efficiency of taxation policies. This redesign of the E-Levy reflects a forward-looking approach to taxation in the digital age.
This revamped taxation policy will be leveraged to boost revenue generation while expanding the domestic tax base to support key sectors of the economy. In May 2022, the Government introduced the controversial E-Levy, which imposed a 1.5 percent charge on electronic transfers, including mobile money and bank transfers. The tax faced significant public criticism and parliamentary disputes during its passage.
Additionally, the Medium-Term Revenue Strategy includes various other reforms, such as:
- Expanding the withholding tax regime to cover different tax types, enhancing taxpayer identification, facilitating efficient tax collection, and simplifying filing processes, especially for incomes within the informal sector.
- Measures to streamline tax returns and scrutinize the modified taxation system, with the aim of reducing tax avoidance and promoting voluntary compliance.
- A review of outdated tax categories like stamp duty, income tax stamp, and vehicle income tax, with a focus on aligning them with current market dynamics.
- Improving the taxation of rental income to ensure fairer contributions from this sector.
- Implementation of taxation on Gross Gaming Revenue (GGR) for industry players and the introduction of withholding tax on winnings, representing a significant step toward a more comprehensive and equitable tax structure.
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