Government does not intend to impose tax on mobile money transactions as is being purported in the public domain, Deputy Finance Minister Kwaku Kwarteng has revealed.
He however added that even if government intends to introduce a tax on the service in future, there will be engagements with relevant stakeholders in the sector to arrive at a mutual understanding.
“In the coming budget, government has not made a decision to impose additional taxes on mobile money as it has been suggested.
“But if at all government is minded to introduce any taxes related to mobile money, it will do so sensitive to the consequences and make sure that the balance is right.”
The Deputy Minister said this at a Mobile Money Stakeholder workshop organised by MTN Ghana to address certain concerns about the service.
The theme for the event was ‘Digitisation Payment in Ghana: The Implications of Additional Taxes on Mobile Money Transactions’.
Mr. Kwarteng further noted that government recognises the impact of mobile money on the economy and the country’s fight toward achieving financial inclusion, and will not do anything to hurt the sector.
He also stressed government’s belief in the private sector as the engine for economic growth, and it will continue providing support by creating the needed enabling environment for businesses to thrive.
He further urged that the public view some of these tax measures by government as a way to grow the economy rather than destroying businesses, saying: “It has been made to look as though more taxes will go to hurt businesses, and on this occasion go to hurt mobile money; but let us remember that unless government gets its fiscals right, the resulting macroeconomic instability will hurt businesses more”.
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.
Speaking at the event, MTN’s General Manager for Mobile Financial Services, Eli Hini, noted that the prospect 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 people’s interest away.
“Rather than levying taxes on the fledgling MoMo industry, we should consider enabling growth of the service by digitising the economy in the payment of fees, rates, taxes, and levies,” he said.
Mr. Hini further stressed that imposing additional tax on MoMo will consequently lead to job-losses, impede the 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 98 percent 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 showed that the value of transactions hit GH¢655millio – up from GH¢428.49million in the first half of 2017. This represents a 52.86 percent increment.
In terms of value, in the first half of this year mobile money transactions stood at GH¢104.60billion, representing a 53.31 percent 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 21.13 percent 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.