Editorial : Taxing Momo transactions not an option

Vice President Dr. Mahamudu Bawumia believes any move to tax Mobile Money (MoMo) would adversely affect the poor, and further discourage the digitisation agenda of government.

In an interview on ‘Peace FM’ this week, the Vice President kicked against any such move – saying applying taxes on mobile money transactions will only increase the burden of the poor, as the telcos will transfer such taxes to the final consumer.

“My view is that we should not tax mobile money because a lot of the people who are using mobile money transactions are very poor people. For example, someone just sends GH¢5 on mobile money, and why would you want to tax that?” he said.

Since the Vice President heads government’s economic management team, it is very reassuring to hear these thoughts from Dr. Bawumia, and it sends a positive signal that such a policy will not be adopted by this administration.

Indeed, as one of the main proponents of government’s digitisation agenda, it would be counter-productive for government to even contemplate such a move since there is a need for use of mobile money platforms in transactions to be encouraged – so that revenue, which would have otherwise been diverted to individual pockets, will go straight to government coffers.

Telecommunication companies charge, at least, a one percent fee on every mobile money transaction; and that, according to the Ministry of Communications, generates about GH¢71million per month.

Communications Minister Ursula Owusu Ekuful is on the record as considering taxing telcos on monies they earn on transaction fees to enable government provide requisite developmental projects to the people.

Obviously, this was met with a lot of resistance – particularly from the telcos themselves, who threatened to pass on the levy to the final consumer. We are indeed very pleased that finally the Vice president has brought clarity to the matter, and has publicly kicked against it.

Chief Executive Officer-Telecommunications Chamber, Ken Ashigbey, also stated that telecommunication companies will resist any attempt by government to tax mobile money transactions. His rationale is that mobile money should rather be used as a vehicle to expand financial inclusion, and we concur fully with that line of thought.

Any move to tax mobile money transactions will not be in the interest of the telecoms industry, nor consumers. Also, this paper considers it morally unjustifiable to tax people for spending their money!

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