By Chikondi Manjawira
BLANTYRE-(MaraviPost)-Consumers Association of Malawi (CAMA) has expressed deep concerns with the introduction of tax on non bank mobile money transactions describing it as painful to consumers and a destroyer of the poor to the poorest.
The concerns follows the announcement by the Minister of Finance through the 2019/2020 Budget Statement section 146 that government has introduced a 1.0 percent final withholding tax on non bank mobile money transactions based on the transaction amount.
CAMA’s Executive Director, John Kapito on Monday uttered that government did not consult consumers on such a matter hence betraying the social contract between consumers and itself. Kapito further said that the introduction of the new tax will only make the life of the poor who have limited access to banks harder and small scale businesses difficult.
“We feel ambushed and therefore we will ambush the government too. The Consumers need to be consulted and have their say on such matters. This new tax is against financial inclusion initiatives and clearly segregative against the poor.
“Mobile money tax is disproportionately harsh to the low income Consumers as it is against equality as provided for in section 20 of the Republican Constitution. It will result in Consumers stopping using mobile money. This tax will have negative social effects and reduce the same tax base in the long run, believed Kapito.”
Additionally, Kapito said that this kind of mobile money tax will contribute to Small Scale businesses ( Mobile Money Agents) earn less due tax pressure and that there will be loss of rural and low income consumers who will drop use of mobile money such as No access to electricity, water, TV subscriptions, airtime just to mention a few.
“This tax will discourage savings among low income consumers who do not have bank accounts. If parliament passes the tax CAMA will be energized that it will be on the street everyday because our role is to lobby that this tax should not be passed and implemented.
“The Minister lied when he said many countries have similar tax because it is only Uganda which is applying 0.5 percent down from 1 percent after public uproar. Similar tax on transactional values has been introduced in other countries and ended being repealed, added Kapito.”
Only two countries within SADC region have similar tax such as Zimbabwe and Uganda. Zimbabwe applying 2 percent on transactions above $20 which was outlawed by the courts. CAMA is in the process of engaging all parliament committees to make sure that the above mentioned particular tax should not be implemented in Malawi.
