CGAP Ghana Boss lauds transparency in taxes on Mobile Financial Services
By Nana Appiah Acquaye, Accra, Ghana
The government of Ghana has been applauded for it transparency role in discussing the implication of additional taxes on Mobile Financial Services in the country.
The Deputy Minister of Finance, Kwaku Kwarteng, earlier this month joined telecom giant MTN Ghana and other leading stakeholders in the country’s fintech space to deliberate of the consequences that the imposition of additional taxes on On The Top (OTT) and Mobile Money Services (MoMo) might possibly have especially on the informal sector of the Ghanaian economy.
It was at this meeting that the Deputy Minister disclosed to delegates that the government has no intention to impose any tax on MoMo transactions.
“We’ll not hurt the hen that lays the golden egg… rather; we seek to partner the telecoms as we seek to move to a more cash-light society. Government has no plans to introduce a tax on MoMo in the next budget… if there’s any such intent in future, I’ll make sure the balance is right,” he stated.
Speaking to Biztechafrica on the sidelines of the meeting in Accra on the theme Digitizing Payments in Ghana, The Implications of Additional Taxes on MoMo Transaction, the Manager for Technology and Business Model Innovation at CGAP, Stephen Rasmussen, lauded the government’s efforts to join the dialogue and have open discussion with stakeholders on the issue.
“I would give him (Deputy Minister of Finance) full marks for that. Because this kind of transparency is unusual, whether the government imposes taxes or not it remains to be seen. But I think the messages were discussed fairly,” he noted.
Asked whether the imposition of additional taxes on mobile financial service will have adverse effect on the poor, Mr. Rasmussen noted with emphasis recent happenings in Uganda and Tanzania where taxes were imposed by their governments but the effects of it were minimal.
“You know, what we have seen before is that it only had small effect on the customer. There was this recent example in Uganda which has a significant impact. Tanzania put in a tax and took it back because it did not have effect. But I think that’s because the current customer tend not to be the poorest people and also they only use it for paying bills and personal transactions. If you want to include everyone in, including the poor people who maybe much more price sensitive, and if you doing all transactions including retail payments they may be much more price sensitive. So you have to take the totality into account,” he said.
CGAP (the Consultative Group to Assist the Poor) is a global partnership of more than 30 leading organizations that seek to advance financial inclusion. CGAP develops innovative solutions through practical research and active engagement with financial service providers, policy makers, and funders to enable approaches at scale. Housed at the World Bank, CGAP combines a pragmatic approach to responsible market development with an evidence-based advocacy platform to increase access to the financial services the poor need to improve their lives.