Speaking at the event, MTN’s General Manager for Mobile Financial Services, Eli Hini noted that the subject of introducing extra tax to the service has the tendency to hurt the growing sector, while also undermining the country’s fight towards financial inclusion.
According to him, government and other stakeholders should rather focus on expanding the ecosystem to include everybody for mutual benefits.
“This service helps to gain financial inclusion as it involves the informal sector. And therefore, there should be an interest to try and expand it so we can elicit all the benefits rather than try and put an impediment that may take out people’s interest away.
Rather than levying taxes on the fledging MoMo industry, we should consider enabling the growth of the service by digitizing the economy by the payment of fees, rates, taxes, and levies,” he said.
The idea of taxing mobile money transactions was first suggested by the Communications Minister, Ursula Owusu Ekuful, during her vetting by Parliament’s Appointments Committee in February 2017. She told the committee that it may not be a bad option as it would generate revenue for government; though she said government is yet to consider its decision.
Mr. Hini further stressed that imposing additional tax on MoMo will consequently lead to job losses, impede fight against poverty, and result in revenue losses due to reduced activities in the area, among others.
Data available indicate that mobile money is leading the way in the digital payment space, with 98percent of digital payments in the country currently, coming from mobile money transactions.
The number of transactions keeps soaring with every available data. In the first half of 2018, data from the Bank of Ghana shows that the volume of transaction hit GHC655million; up from GHC 428.49million in the first half of 2017.This represents a 52.86percent increment.
In terms of value, in the first half of this year, mobile money transactions stood at GH¢104.60billion, representing a 53.31percent increment over GH¢68.23billion, which was the data recorded from the first half of 2017.
The balance on float has also soared alongside. In the first half of 2017, it stood at GH¢1.8billion, but in the first half of 2018, it increased by 21.13percent to GH¢2.18billion. Recent data from the Bank of Ghana show that mobile money subscribers have reached almost 30 million as of June 2018.
Adding his voice to the subject as a panellist at the stakeholder workshop, Stephen Rasmussen, Manager, Technology Business Model Innovation, CGAP,called for cross policy dialogues to assess the consequences of new policies such as the introduction of tax, on the service, adding however, that that it is too early to implement tax.
Meanwhile, speaking at the forum, Deputy Finance Minister, Deputy Minister of Finance, Kwaku Kwarteng, who did not outrightly dismiss government’s intention to tax mobile money in the future, urged that the public view some of these tax measures by government as a ways to grow the economy, rather than destroying businesses.
He said: “It has been made to look as though more taxes would go to hurt businesses, and on this occasion, go to hurt mobile money, but let us remember that unless government would get its fiscals right, the resulting macroeconomic instability will hurt businesses more.
In the coming budget, government has not made a decision to impose additional taxes on mobile money as has been suggested. But if at all government is minded to introduce any taxes related to mobile money, government would do so sensitive to the consequences and would make sure that the balance is right,” the Deputy Minister assured.
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