Authorities in Ivory Coast imposed a 0.5 per cent tax on cash transfers over mobile money services, a move estimated to net XOF10 billion ($18.2 million) for the country’s government.
Reports from newswire Agence de Presse Africaine said the tax will be levied on the company or individual making the payment and must be collected by the transaction processor.
The charge applies to transfers made through both mobile operators and remittance companies using mobile applications. Announcing the levy, the tax authority hinted the sum received could be even higher than XOF10 billion, as it was currently struggling to track the amount of money passing through the platforms.
Ivory Coast is not the first market in Africa to introduce levies on mobile money transactions. Authorities in Kenya, Tanzania and Uganda impose a 10 per cent excise on mobile money transaction fees and Zimbabwe adds a surcharge to each individual transaction.
In a blog published in October, GSMA regulatory director for Africa, Brian Muthiora, warned negative impacts from African governments taxing mobile money transactions would likely fall heaviest on users already below the poverty line.
“Rather than levying taxes on the fledgling mobile money industry, governments should consider enabling the growth of mobile money services by digitising the payment of fees, rates, taxes and levies due from taxpayers.”
Doing so, he explained, “can both expand revenue mobilisation and support the growth of the mobile money sector.”