Monday, September 23, 2019
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MTN Ghana: "More Taxes Would Injure The Mobile Money Sector

A lot of literature and academic studies is available on the need for African countries to collect more tax revenue from citizens and businesses. The IMF has been imploring sub-Saharan countries to focus on expanding and diversifying their tax bases. Consequently, there’s also a growing trend of governments in Africa looking to tax the fastest-growing sector of the past two decades: the Mobile Money Sector.

Some countries have already experienced the repercussions of the implementation and increase in tax on Mobile Money services. Uganda saw a drop of about 33 percent in the adoption of mobile money services in three months and a revenue loss of USD 1.2 billion when the government imposed taxes on the industry. A number of workers and unions who receive wages through Mobile Money even resorted to demonstrations. The country has subsequently scrapped 3 out of the 4 levies imposed on mobile money transactions, namely depositing, sending and receiving cash. On July 16, 2019, the tax imposed on Mobile Money withdrawals was also reviewed downwards from 1% to 0.5%.

Mobile Money's importance in the drive towards achieving a cashless economy cannot be overlooked, especially in developing countries. MTN Ghana believes that the imposition of additional taxes on mobile money service will negatively impact the industry,  and Ghanaians would be forced to resort to cash transactions. Eli Hini, the General Manager of Mobile Money at MTN Ghana said high taxes would stifle innovation, growth and financial inclusion, as well as derail the government's cash-light and digital payment agenda.

At a forum in Accra, Hini mentioned that the relevant taxes are already being paid by customers who use mobile money service just like any other means of payment, and that all the operators in the mobile money value chain paid taxes on their business operations. The implementation of additional taxes would cause a negative ripple effect on the service, as well as other related industries, he said. 

Hini also stated that the current mobile money wallet size of GHS 2,000 was too small and he entreats the Bank of Ghana (BoG) to review it upwards.


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