CC image courtesy of Harvey Barrison.
A new Zimbabwean government tax on mobile money has taken effect, meaning operators and consumers are now subject to a US$0.05 tax on every transaction.
Presenting the Budget for 2014 last month, finance minister Patrick Chinamasa announced a levy will be charged on each mobile money transaction with effect from January 1, 2014, as the government seeks to find new sources of funding for the dwindling state cash pot.
Acknowledging the impact of mobile money in providing financial services to the large unbanked section of Zimbabwean society, Chinamasa nonetheless announced the charge on such services, following in the template of levies already taken on ATMs and Point of Sale (PoS) transactions.
“Notwithstanding the positive impact of mobile banking services on the welfare of the then financially excluded members of our society, this product should, however, conform to the tax principle of fairness, hence, the current tax on similar products such as Automated Teller Machines (ATM) and Point of Sale should apply,” said Chinamasa.
“The automated financial transaction tax, thus, applies on transfer of funds from a financial institution to a mobile platform.
“This new phenomenon has provided greater flexibility and financial inclusivity to the majority of the population in remote areas where banking services are not available notwithstanding the positive impact of mobile banking services on the welfare of the then financially excluded members of our society.”
Econet Wireless currently operates the most popular mobile money service in Zimbabwe, called EcoCash, which saw growth to more than three million subscribers in its first two years, resulting in a multi-million dollar network expansion in September. NetOne also runs a service known as OneWallet.
Econet has passed the transaction levy on to customers, telling users: “We advise that a transaction tax of 5 cents will be levied on applicable transactions effective January 1, 2014 in line with Government tax policy.”
HumanIPO reported in December Zimbabwe’s second operator Telecel is planning to launch its own mobile money service – Telecash – in early 2014.