"38% of Ugandans used less of mobile money after 0.5% tax imposition \u2013 Report reveals"

" \n 38% of Ugandans used less of mobile money after 0.5% tax imposition \u2013 Report reveals \n \n\n \n A survey conducted by the United Nations Capital Development Fund (UNCDF) reveals that some 38 percent of Ugandans used less of mobile money platforms after the Ugandan government introduced a 0.5 percent tax on transactions in 2018. \n \n\n \n Per data contained in the report produced by the UNCDF following the survey, while some 38 percent of Ugandans used less of mobile money platforms for transactions as a result of the tax, 44 percent 0f Ugandans maintained the same level of use of mobile money with some 17.8 percent of the Ugandans increasing their use of mobile m o ney platforms. \n \n\n \n According to the report titled The Impact of Mobile Money Taxation in Uganda, the switch to agent banking or cash was the main reason behind the less use of mobile money by 38 percent of the citizenry. \n \n\n \n For citizens who used the same amount of mobile money or more, the main reason was due to the unavailability of better alternatives. \n \n\n \n \u201cThe central theme emerging amongst those who claimed they use Mobile Money more or the same amount as before was that they had no alternatives. One respondent, for example, said moving away from Mobile Money is not possible for her: \u201cWe can\u2019t move away from it because we don\u2019t have banks here and it\u2019s what people use to pay. \n \n\n \n \u201cMeanwhile, the main theme among respondents who claimed they use Mobile Money less as a result of the tax (38 percent) is that they switched to alternatives such as agent banking or cash. Some respondents switched back to cash, explaining that \u201cthe tax is so high that sometimes I have to get a boda-boda (motorcycle taxi) to deliver the cash physically.\u201d Another respondent said they \u201c\u2026switched to the bank system because of the expensive tax. Withdrawals there are cheaper than MM withdrawals,\u201d noted the report. \n \n\n \n The report further notes that there was a drastic decrease in average transaction value f mobile money after the tax was introduced \u2013 from around UGX 54,000 [$15] in Q2 2018 to just under UGX 29,000 [$8] in Q4, a decrease of over 50 percent. \n \n\n \n The total value of mobile money transactions in Uganda peaked at UGX 6. 9 trillion [$1.9 bn] in 2018 and dropped by around UGX 1 trillion [$280m] in the months following the tax. \n \n\n \n Meanwhile, according to the report, the number of registered mobile money accounts rose to 31.3 million by the end of June 2021 from 30.5 million at the end of March 2021, from a base of 552,047 registered mobile money accounts in 2009. \n \n\n \n The value of annual transactions has grown from approximately $37 . 3 million in 2009 to $18.7 billion in 2020, with customer balances also increasing from approximately $1 million in 2009 to $144.2 million in 2020. \n \n\n \n The immediate fall in the value of mobile money transactions on the back of the implementation of the tax but thereafter a rise in the value of transactions years later affirms Tesah Capital\u2019s assertion of the value of electronic transactions returning to pre-tax levels and continuing to grow in the long term. \n \n\n \n Lessons for Ghana \n \n\n \n With the introduction of the E-Levy, Ghana is likely to experience a decline in the value of mobile money transactions as was the case of Uganda. \n \n\n \n Currently, the value of mobile money transactions is estimated at GHS 500 billion and projected to hit a total of GHS 1 trillion in 2022. \n \n\n \n The value of mobile money transactions as measured by the mobile money interoperability platform implemented by government, increased from GHS 35 billion in 2015 to GHS 570 billion in 2020. \n \n\n \n Several economic analysts are of the view that the E-levy is retrogressive to the development of the country\u2019s financial sector. \n \n\n \n Though the government believes it is a way to raise enough revenue to close the large fiscal gap, critics of the levy are of the view that it is a lazy approach by the government in raising revenue. \n \n\n \n Experts are of the view that the new levy will promote informality and the cash economy as well as derail ultimately its digitization efforts and financial incusing agenda. \n \n\n \n The introduction of 1.75% E-levy by government is to provide the means to tax the informal sector and to help widen the tax net. \n \n\n \n It is expected to increase the revenue generation capacity of the country with government projected to earn around GHS 6.9 billion in revenue from the levy in its first year of implementation. \n "

"38% of Ugandans used less of mobile money after 0.5% tax imposition \u2013 Report reveals"

Bank Fraud: BoG urges strict compliance with monthly fraud reporting amidst sector concernsAMP

Global architectural reform to top agenda of the AfDB’s 2024 annual meetingsAMP

5 largest airlines in Africa by fleet size in 2024AMP

New Gold emerges sole gainer on local bourseAMP

Zimbabwe’s new Central Banker tasked to fix 77% currency crashAMP

Joseph Dadzie appointed CEO of GNPCAMP

Rafael Nadal pulls out of Monte Carlo MastersAMP

Premier League: Hat-trick hero Palmer fires Chelsea to win over Man Utd; Liverpool back the top AMP

Black Stars slip to 68th in latest FIFA RankingsAMP

Bank Fraud: BoG urges strict compliance with monthly fraud reporting amidst sector concernsAMP

Global architectural reform to top agenda of the AfDB’s 2024 annual meetingsAMP

5 largest airlines in Africa by fleet size in 2024AMP

New Gold emerges sole gainer on local bourseAMP

Zimbabwe’s new Central Banker tasked to fix 77% currency crashAMP