Ghana: Gov’t Won’t Impose Tax on Mobile Money Soon

Kwaku Kwarteng, Deputy Minister of Finance, Ghana

Accra, Ghana, August 15, 2018//-Ghana’s government has allayed fears that it would not impose tax on mobile money transactions in the West African country, in the near future.

A Deputy Minister of Finance, Kwaku Kwarteng who gave the assurance at MTN Mobile Money Stakeholder Forum in Accra, stressed: “We haven’t made a decision to impose additional  taxes on mobile money transactions in the coming budget”.

“But if the need arises for us to impose tax on mobile money transactions, we will do it in a balanced way”, he stated.

Mr Kwaku continued: “We are in government to do what we think is right. We believe that the focus must move from taxation to production, but we do so sensitive to the very things we need to help the private sector”.

We think mobile money is a good development. We are happy to support it and government will certainly take into account the many concerns that have been shared here in relation to taxing mobile money transactions if at all we are minded to consider that discussion”.

Contributing to the discussion, the General Manager of Mobile Financial Services at MTN Ghana, Eli Hini  suggested to African governments that: “Rather than levying taxes on the fledgling mobile money industry, governments should consider enabling the growth of mobile money services by digitizing the payment of fees, rates, taxes and levies due from taxpayers”.

This can both expand revenue mobilization and support the growth of the mobile money sector, he explained.

Eli Hini, General Manager, Mobile Financial Services at MTN Ghana

For instance, Mr Hini noted: “Taxing mobile money in Tanzania did very little to support public finances and to advance the many positive contributions mobile money can make to society”.

     It is important that Ghana does not consider going in that direction as the benefits of the service out-weighs the exaggerated gains from taxes, he said to a thunderous applause from stakeholders at the workshop.

Taxation will widen the poverty gap

In Ghana, for instance, 24.2% of the population are below the poverty line, according to the Ghana Poverty & Equality Report, 2013.

The negative impact of taxing mobile money transactions is likely to fall most heavily on these individuals. Imposing taxes may increase the percentage within the poverty bracket, Mr Hini stressed.

BoG challenges private sector

The First Deputy Governor of Bank of Ghana (BoG) Maxwell Opoku-Afar who did not contribution to the mobile money tax debate at the workshop because of his unique position as the regulator, however urged all the stakeholders to work together to reduce cash-outs  in the country’s mobile money payments system.

He also challenged the private sector players in the e-money ecosystem to promote the country’s cash-lite agenda and reduce cash-outs drastically.

Mobile money in figures

Latest data from the BoG revealed that mobile money subscribers in Ghana have reached 30 million as of June 2018. It also indicated that the amount of money mobilised through mobile money hit record level of GH¢2.3 billion as of December 2017, representing a growth of 84.6 percent over the December 2016 amount of GH¢1.3 billion.

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