MoMo tax will discourage digitisation, affect the poor – Bawumia 

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Vice President Dr. Mahamudu Bawumia

Vice President Dr. Mahamudu Bawumia, has made a strong case against any move to tax Mobile Money (MoMo), saying its implementation would adversely affect the poor and further discourage the digitisation agenda of government.

His comments come on the back of debate over whether transactions done through mobile money platforms should be taxed, given its wide use and acceptability in the country and the perceived profits telecommunication companies are making from the payment platform.

But in an interview on Peace FM yesterday, the Vice President kicked against any such thoughts: 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.

He added that to push the digitisation agenda, 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.

“We want to increase economic activities and the use of mobile money is key. If you pay for a government service and you pay by mobile money, the money will go straight into the account of government. The alternative is to give someone the cash, and you don’t know how much of it will end up in the accounts of government.

“Sometimes on our toll roads, you go on the Tema motorway and pay some toll; you are not sure how much of it ends up with government. But if you digitise those payments, you see that suddenly government revenue is going up; and the empirical evidence generally shows that when you digitise, economic activities go up,” Dr. Bawumia said.

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. This has instigated calls from Communications Minister, Ursula Owusu Ekuful, for government to consider taxing telcos on monies they earn on transaction fees to enable government provide requisite developmental projects to the people.

Meanwhile, the Chief Executive Officer-Telecommunications Chamber, Ken Ashigbey, has said telecommunication companies will resist any attempt by government to tax mobile money transactions. For him, mobile money should rather be used as a vehicle to expand financial inclusion; hence, any move to tax transactions will not be in the interest of the telecoms industry or consumers.

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