THE taxation of mobile money transfers came into effect on January 1 with the leading mobile firm Econet Wireless advising its estimated eight million subscribers of the introduction of the new levy expected to boost the new government’s depleted coffers.
In his $4,2 billion budget for 2014 announced on December 19, Finance minister Patrick Chinamasa said the budget is premised on aggressive revenue collection and introduction of new taxes in mining and mobile money transfers.
He commended the mobile banking service providers for “enhancing financial inclusion by reaching out to the formally unbanked through introduction of such products” such as Econet’s EcoCash, NetOne’s One Wallet, Textacash, E-wallet, among others. But Chinamasa was quick to say the government would introduce a levy for mobile money transfer.
Econet, whose EcoCash is proving popular, on New Year’s Day sent out messages to its customers advising them of the introduction of the new levy which analysts say would hit hard on the already impoverished citizens.
“We advise that a transaction tax of 5 cents will be levied on applicable transactions effective 1-1-14 in line with government tax policy,” part of the message from EcoCash reads.
Critics of the new levy are adamant it is a further punitive taxation of the poor who in the past few years relied on mobile money transfers.
There are concerns many people may be forced to revert to using unorthodox and other traditional means of sending and receiving money, which would have adverse effects on the country’s fragile banking sector.
The government has also brought into effect in the new year an additional road levy of 2c/litre and 1cent/litre of petrol and diesel respectively, to service a loan from the Industrial Development Bank of South Africa to finance the Plumtree-Mutare road project.
