No plans to introduce tax on MoMo in 2019 budget – Kwaku Kwarteng

August 15, 2018

Deputy Minister of Finance, Kwaku Kwarteng, has given a firm assurance that government has no plans of introducing an additional tax on Mobile Money (MoMo) transactions in the 2019 budget.

According to him, MoMo has become the government’s ‘best bet’ for achieving financial inclusion in the country.

“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 said.

Mr Kwarteng added, “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.”

The Deputy Minister spoke at MoMo Stakeholder Workshop organized by MTN on the topic, “Digitizing Payments in Ghana: The Implications of Additional Taxes on Mobile Money Transactions.”

The workshop brought together players from the financial space and representatives of Telecoms.

On his part, Manager for Technology and Business Model Innovation at CGAP, Stephen Rasmussen has urged the government not to be “hasty” in taxing MoMo transactions.

“When you start taxing MoMo, what is the effect it would have on policy objective? Is it positive or negative?” he asked.

“Don’t be hasty in implementing the tax,” he concluded.

The General Manager for Mobile Money Ltd., Eli Hini, in his presentation pointed out some social interventions resulting from the introduction of MoMo transactions in Ghana thus the initiative has had a significant impact on the agricultural value chain.

He fears additional tax on the transaction will widen the poverty gap of 24.2%. 

He added that levying MoMo could lead to job losses and unemployment especially in the case of MoMo agents and agencies.

He, however, recommended that, instead of levying MoMo transactions, the government should consider enabling the growth of MoMo services by digitizing payments to cater for tax mobilization and compliance due from taxpayers. 

He is upbeat this could go a long way to expand revenue mobilization and support economic growth.

The incoming Managing Director of Barclays Ghana, Abena Osei-Poku, in her presentation urged the government to support MoMo transactions so as to increase tax compliance and reduce money laundering in the country.

MoMo accounts

First Deputy Governor of the Bank of Ghana, Dr Maxwell Opoku-Afari, said since the introduction of electronic money guidelines in 2015, Mobile Money transactions have increased at a “geometric rate.” 

He said the registration of MoMo accounts has increased from 13 million in the year 2015 to 29.99 million currently. 

Dr Opoku-Afari said financial inclusion growth stands at 58% as of 2017 compared with 41% in 2014.

According to the Bank of Ghana, the amount of money mobilized through mobile money reached GH¢2.3 billion as of December 2017,
representing a growth of 84.6% compared with the December 2016 amount of GH¢1.3billion.

Source: Ghana | Bismark Awusah | JoyBusiness

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