MTN Ghana CEO, Selorm Adadevoh, has said that telcos already pay corporate taxes on their mobile money earnings so any additional tax will tantamount to taxing the consumer.
“We already pay corporate taxes on mobile money so more taxes are likely to burden the consumer, which has the potential to erode all the gains we have made over the last ten years.
“My recommendation is that this should not be the legacy we leave behind – we should rather think more about how we can use mobile money to improve tax collection, widen the tax net and drive revenue growth rather than stifling the growth of mobile money itself,” he said.
Speaking to journalist at the MTN Mobile Money 10th Anniversary Dinner in Accra, Mr Adadevoh said MTN’s target is to ensure that within the next five years all Ghanaians will use mobile to perform any and every financial transaction.
The MTN CEO’s remarks come on the back the Ministry of Communication’s recommendation that telcos earnings from mobile money should be taxed.
The sector Minister, Ursula Owusu Ekuful, at a recent press conference, noted that telcos earn ¢71 million from mobile money service charges every month, and she believes that money should be taxed.
She noted that her colleague Finance Minister is at variance with her on that recommendation, but insisted that the Ghana Revenue Authority (GRA) should have a conversation with the telcos about their monthly earnings from mobile money.
Even though the Minister did explain that her recommendation was not for consumers to be taxed directly for using mobile money, some independent organizations like CDD-Ghana and ITConsortium have kicked against it.
They argue that additional taxes on telcos earnings from mobile money will eventually be passed on to the consumer.
Afrobarometer Monitoring and Evaluation Officer at CDD-Ghana, Samuel Adusei Baaye told Adom News that Ghanaians are already burdened with the 50% increase in the Communication Service Tax (CST), moreover, telcos pay corporate taxes on their mobile money earnings, so there is no need for additional taxes on that revenue stream.
He, therefore, called on government to reconsider any plan to tax mobile money earnings of the telcos.
Managing Director of IT Consortium, an electronic payment solutions provider, Romeo Bugyei agreed with CDD-Ghana, saying that every partner on the mobile money platform already pays corporate taxes on their earnings from the platform, so any additional taxes will eventually be a burden on the consumer.
He said for a country that is working towards a cashless society and driving the use of electronic money platforms, such a tax would be counterproductive to the national agenda.
He added that it would also harm the financial inclusion drive of the country.
“It is not a secret that very few Ghanaians are banked and insurance is even worse. Now mobile money has proven to be the platform that will drive the agenda to bring more Ghanaians into the financial system and placing tax burdens on them is not the way to go,” he said.
Romeo Bugyei asked “why did government tag taxes on banks' electronic money service charges as nuisance tax and abolished them – it is because government knows that when you tax those services it will eventually derail the financial inclusion agenda. Mobile money is also an electronic money service so why do you want to place a nuisance tax on it?”