Here’s a Ghanaian Economist’s advice to the President following agitations to tax profits on mobile money transactions

A Ghanaian Economist and the Director of Institute of Statistical, Social and Economic Research (ISSER), Prof Peter Quartey has urged the government of Ghana to tread cautiously with the idea to tax Mobile Money transactions.

Prof Peter Quartey

He noted that the government should only tax if it is certain that it won’t be passed on to consumers.

Prof Quartey said this while speaking at the ISSER 2020 budget review.

“We should know what type of tax we are going to impose. Are we going to tax the telcos or users of the service? If you tax users, majority will fall out. I am in support of it, yes, but let’s tax the Telcos but let’s not overtax them. Let’s impose taxes that they can accommodate without even having to pass onto consumers,” he emphasised.

Background

Ghana’s Communications Minister, Ursula Owusu-Ekuful recently hinted at a possible introduction of a tax on MoMo transaction,

According to her, the operators generate some GH¢71 million monthly on the transactions, yet that money remains untaxed.

The total value of mobile money transactions for the first six months of this year reached GH¢140.2 billion, up from the GH¢104.6 billion recorded in the same period in 2018. Data released by the Bank of Ghana showed that this represents a 34 percent rise in the value of transactions recorded for the period under review.

Between January and June this year, the total volume of mobile money transactions reached GH¢915.8 million compared to the GH¢655 million recorded in the same period last year. This translates into an estimated 40 percent growth.

In June, the World Bank declared Ghana the fastest-growing mobile money market in Africa with registered accounts increasing six-fold.

This translates into huge profits for telecom companies and the Communications Minister, hence, wants to ensure that the State does not miss out on revenue from the sector.

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