Ofori-Atta Shifts Road Toll Tax From Rich Car Owners To Poor Mobile Money Users

The Akufo-Addo government has announced the cancelation of road tolls on all public roads, a thing that will be eagerly welcomed by rich car owners who can afford to enjoy the roads and whose new privilege has invoked mixed reactions because the government has on the other hand slapped taxes on Mobile Money (MoMo) transactions.

MoMo users are to a large extent with the informal bracket of the economy, where poverty is a major concern where formal banking transactions are not attractive because of their meagre funds.

Presenting the 2022 budget, Finance Minister, Ken Ofori-Atta said the government is rather levying 1.7% on every mobile money transaction above GHS 100.

It means when the budget is approved, sending money via mobile money will attract an additional 1.7% levy from the government. The new mobile money levy takes effect immediately after the budget is approved.

Already such transactions attract a 1% standard levy so that when a person sends Ghc100, they are charged Ghc1. With the addition of the 1.7% levy, it means that when a person sends Ghc100, they will now pay Ghc2.70.

Between mobile money usage and private car ownership, the poor use mobile money more, but Ken Ofori-Atta says allowing car owners to ride toll-free and shifting the charge on poor mobile money users is a masterstroke that could generate more income for the government to compensate for the loses from the scrapped road tolls.

Critics think it is an ambitious gamble that will backfire as it has done in several African countries that tried it recently.

The justification that the Minister gives the decision to abolish road toll collection is that it causes traffic on the road, and the long stay in traffic leads to more pollution of the environment.

He also said over the years the road toll collection scheme has not been effective – it is not clear what he means by this.

“Over the years, the tolling points have led to heavy traffic on our roads and lengthened travel time from one place to another, impacting negatively on time and productivity. The congestion generated at the tolling points, besides creating these inconveniences, also leads to pollution in and around those vicinities,” he said.

“To address these challenges, Government has abolished all tolls on public roads and bridges. This takes effect immediately after the Budget is approved. The toll collection personnel will be reassigned. The expected impact on productivity and reduced environmental pollution will more than offset the revenue forgone by removing the tolls,” he added.

Now, in regards to the unemployment that will be caused by the abolishment of the road toll collection, Ofori-Atta promised that government will push the affected toll collectors somewhere. That somewhere is not yet known.

The Minister has also not been clear about what will become of the road toll infrastructure, including booths that were built with taxpayers’ funds.