Soft Option?

Ghana’s mobile-money tax risks killing the golden goose, analysts say

By David Whitehouse

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Posted on July 6, 2021 16:38

 © REUTERS/Siphiwe Sibeko
REUTERS/Siphiwe Sibeko

Ghana’s plan to increase taxes on mobile-money agents risks restricting the growth of an industry that has the potential to become a significant contributor to public finances, analysts say.

The new 10% withholding tax on cash-out transactions will be collected by telecoms companies from mobile-money agents. Implementation has been suspended until 1 September after having initially been introduced on 1 July and then rolled back, according to the Mobile Money Agents Association of Ghana on its Facebook page.

Initial protests have caused a delay, but as it stands, the government’s intention is still to introduce the tax. The government sees mobile money as an “easy way” to raise revenue, but “taxation is not the way to go at this point,” says P. K. Senyo, a Ghanaian senior lecturer in information systems at Southampton University in the UK.

“The time is not right” for the tax increase, as Ghana has not yet maximised mobile-money use, he says, estimating that only about half of the population are active users of mobile money.

Ghana is in the process of rolling out a

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