Will taxes kill mobile money in Africa?
Wednesday, January 15, 2014
One sector continues to show growth in Africa and demonstrate the genuine potential the continent has to leapfrog global counterparts: mobile money services. Stakeholders, including mobile operators, have echoed the sentiment that the market is gaining traction and offers significant opportunity. However, recent media reports have highlighted one controversial aspect of the mobile money transfer market that continues to generate news headlines: taxation on mobile money services offered by network operators.
There have been numerous reports of the implementation of tax directives and related legislation by authorities in various countries – primarily within East and West Africa.
Kenya and Uganda are understood to be amongst the first to initiate tax on fees charged by operators to utilise mobile money services. A report by the Economist held that Kenya and Uganda have turned to the telecommunications industry as a source of additional revenue to support planned increases in expenditure.