NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

In the context of the Covid-19 pandemic, cash-strapped governments across Africa will be looking for ways to fill revenue gaps. Having long faced challenges in taxing large multinational corporations and significant informal economic activities, they may be tempted to raise much-needed revenue relatively easily by imposing taxes on rapidly growing digital financial services, particularly mobile money. However, increasing mobile money usage across the continent has the potential to expand financial inclusion. And levying taxes, particularly on transactions, is likely to have a regressive effect.

A new GSMA paper by Killian Clifford explores the causes and consequences of these taxes by examining the cases of four countries where a tax on mobile money transactions was proposed. The experiences of Uganda, Cote d’Ivoire, Malawi, and Congo-Brazzaville point to several unintended consequences including the reduction or reversal of the taxes due to public outcry and a decrease in mobile money usage. The cases also illustrate the potential for these taxes to result in the deferral of infrastructure investment by operators, and to undermine financial inclusion of vulnerable groups and national digital development plans.

In this webinar, Killian will present the paper’s findings and discussants Dr. Waziona Ligomeka, Professor Njuguna Ndung’u, and Professor Mick Moore will share their thoughts. The event will be moderated by Rhiannon McCluskey and Moyosore Arewa of the ICTD, who will facilitate questions from the audience in the final 20 minutes.

Please register here to attend via Zoom. Alternatively, this seminar will be livestreamed to YouTube. This event is connected to the ICTD’s new DIGITAX programme on digital financial services, digital ID, and tax.