EXPEDITE INTRODUCTION OF TAX LEVY ON MOBILE MONEY TRANSACTIONS GOVT URGED

GOVERNMENT should expedite the introduction of a tax levy on mobile money transactions for businesses only and not individuals, Economist Emmanuel Zulu has said.

Speaking to The Scoop, Mr. Zulu said during the 2024 national budget presentation, Finance and National Planning Minister Situmbeko Musokotwane proposed introducing a levy of between 80ngwee and K1.80 ngwee on the transaction value of person to person mobile money transfers.

“Government may be losing revenue as business entities have resorted to receiving payments through mobile money but this would only erode the incomes of individuals,” he said.

Mr. Zulu said it is the assumption of many that the Government is trying to increase its domestic revenue by introducing such initiatives.

“This will only discourage the use of digital platforms for payments and transfer of money. Government should therefore consider its agenda for digital inclusion even as it goes ahead to introduce such taxes because this will discourage the country’s efforts towards digital financial inclusion,” he said.

He said any aspect of increasing domestic revenue is what the government is currently facing to come up with initiatives of taxing.

“Getting money from mobile money transactions through taxing will discourage the already progressing digital financial inclusion because very few people nowadays are moving with hard cash but they are making their transactions through digital finance and so far, it is doing well.

We understand very well that there could be income or revenue that is being lost by business entities that are using mobile money but I think to individuals that are not even registered as businesses, it is actually eroding already decreased interest below income because even the disposable income is actually being eroded,” he said.

Mr. Zulu added that the government should have first considered rolling out a sensitization program for everyone’s better understanding.

“Government should have rolled out a sensitization program or should consider doing so that everyone becomes fully aware and knows where their money is going. Just an announcement that they will start taxing mobile money transactions is not enough. We would love to see the details of who is going to be taxed, is it individuals that are not even involved in business or maybe it is the business entities that are going to be taxed when it comes to that type of taxing,” he said.