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Business News of Monday, 31 August 2020


'I don’t believe Mobile Money should be taxed' – Bawumia

Vice-President, Dr Mahamudu Bawumia Vice-President, Dr Mahamudu Bawumia

Vice President Dr. Mahamudu Bawumia has said he does not think Mobile Money should be taxed beyond the corporate taxes the telcos already pay on their mobile money earning.

He was speaking in an exclusive interview with Kwame Sefa Kayi on Peace FM.

“I don’t think Mobile Money should be taxed because most of the people who use the service are poor people so if you put more taxes on it they will suffer,” he stated.

This runs contrary to the position of the Communications Minister, Ursula Owusu Ekuful, who has been campaigning for a special tax to be placed on the one percent service charge telcos put on mobile money.

According to her, government’s real time audit of the telcos’ revenue flow indicates the telcos were making GHS71 million a month from Mobile Money service charges alone, and she strongly believes that money should be taxed.

The Minister however admitted that she was at variance with her colleague Finance Minister as to whether the telcos earnings from MoMo should be taxed.

Indeed, the Vice President’s declaration clearly indicates the Communications Minister’s insistence on placing additional taxes on the telcos earnings from MoMo is not popular in her own government.

The Finance Minister, who is in charge of revenue collection, and the Vice President, who is the Chair of the government’s Economic Management Team, completely disagree with her.

What’s more, the Vice President completely agrees with the popular position that placing another tax on MoMo earnings of telcos will eventually affect the consumer because telcos are already paying corporate and other taxes on all their revenue lines monitored in real time by the government.

MoMo as Cashless Society Driver

Dr. Bawumia said what is rather important is for Mobile Money to be used as a vehicle to accelerate Ghana’s journey to a cashless society.

He noted, for instance, that Ghana’s US$4.5 million mobile money interoperability platform, which is the first of its kind in Africa has put over 15 million bank accounts in the pockets of otherwise unbanked people.

“Now because of mobile money interoperability, there is seamless communication between wallets on various networks and between wallets and other platforms like bank accounts and other financial technology (FinTech) platforms,” he said.

Indeed, the custodian of the mobile money interoperability platform, Ghana Interbank Payments and Settlements System (GhIPSS) reported that in the first half of the year, transaction on that platform far outstretched transactions on its other platforms, showing between 400 and 600% growth over that of the same period last year.

Universal QR Code

The Vice President said that gave government the impetus to introduce the universal QR (quick response) Code, which some banks and retailers have already started using, as government prepares to launch it in a bigger way to ensure seamless transactions without human intervention.

“With interoperability and the QR Code, we now have the infrastructure to go fully cashless in the shortest possible time. Soon trotro passengers will be able to pay their fare electronically and even shoe shines and waatse sellers will be able to receive payments on their phones,” he said.

In a jovial comment, Dr. Bawumia said “I am told even Auntie Muni Waatse has already been signed unto the universal QR Code”, adding that very soon retail shops will have their own QR Codes and do away with the expensive point of sale (POS) machines.

According to the Vice President, since the introduction of the electronic payment platforms in the various state enterprises and institution, government revenues have gone up significantly, clearly indicating that digitization increases revenue and indeed boosts economic activity.

The Vice President is confident that Ghana’s digitization agenda is set to lead the transformational development the country aspire to.