Study Reveals Age, Education Influence Support for Ghana's E-Levy Among Informal Workers

A recent investigation by the International Centre for Tax and Development unveils intriguing insights into the demographics supporting Ghana's Electronic Transfer Levy (E-levy), introduced in May 2022. This survey, encompassing over 2,700 informal workers in Accra, delves into the equity and perception implications of the controversial tax measure.

Demographic Disparities in E-Levy Support

According to the study, older and more educated Ghanaians within the informal sector exhibit a stronger inclination towards the E-levy. This group's support is largely predicated on their trust in the government's capability to judiciously collect and allocate tax revenues. Conversely, younger and less educated workers harbor skepticism towards the E-levy, primarily attributing their stance to dissatisfaction with government performance. This dichotomy underscores a significant correlation between age, education level, and the perception of tax equity and governance efficiency.

Exploring the Roots of Trust and Skepticism

The research highlights a prevalent belief among older and more educated informal workers that the government will effectively utilize the E-levy for the public good. This trust contrasts sharply with the prevalent distrust among younger, less educated counterparts, who question the government's accountability and transparency in tax collection and expenditure. Such skepticism is further fueled by concerns over the E-levy's regressive nature, despite attempts to make it more progressive through measures like a 1% tax on transactions exceeding a 100 cedi daily threshold.

Implications for Policy and Governance

The study's findings prompt a critical examination of the E-levy's design and implementation, suggesting a need for more inclusive and equitable tax policies that address the concerns of all demographics. Enhancing transparency and demonstrating tangible benefits of tax revenues could mitigate skepticism and build broader support for the E-levy among younger and less educated populations. Furthermore, these insights offer valuable perspectives for policymakers aiming to foster a more inclusive economy and efficient tax system in Ghana.

This nuanced understanding of demographic influences on tax support not only sheds light on the challenges facing Ghana's E-levy but also offers broader lessons on the importance of trust and transparency in tax policy. As Ghana continues to navigate the complexities of implementing the E-levy, these findings underscore the need for a balanced approach that considers the diverse perspectives and needs of its citizens.