Call it an African miracle. Eleven years ago mobile money was born in Kenya. Today the service processes one billion dollars every day through 690 million registered accounts, generating direct revenues of over $2.4 billion worldwide. Impoverish citizens without bank accounts enjoy the most secured way to transact through mobile payment systems. It amounted to nearly half of the GDP in Kenya last year. Not anymore.
In January, Ivory Coast imposed a 0.5 per cent tax on transfers via mobile money services. Kenya last month increased its tax on mobile money transfer fees from 10 to 12 percent. Benin introduced a tax of 5 CFA francs ($0.01) per megabyte consumed on social media usage. And Zambia has proposed a daily levy on consumers who use the internet to make phone calls.
Such trend has shaken the industry to its core. Governments reluctant to fix the corrupt revenue collection systems always grab lowest hanging fruits. And mobile phone is their preferred target. The African governments’ informal consensus to punish the mobile payment services is suicidal. Even the IMF is uncomfortable with taxing the mobile payments and internet. Reuters reports.
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