Revenue from the Mobile Money tax in Cameroon stood at CFA7.3 billion between February and May this year, according to data published by the Directorate General of Taxes (DGI). With no revenue collected in January, this figure makes a monthly average of CFA1.8 billion.
If this trend is maintained, the tax on money transfers will generate CFA12.77 billion over the rest of the year. Overall, the Tax Directorate will collect CFA20.07 billion for 2022, up 7 million from the initial target. The extra revenue could be higher since, according to the manager of a Mobile Money outlet, the end-of-year holidays and the back-to-school seasons (August, September, and October) are busy times for money transfer activity.
Many schools and universities in Cameroon now allow students to pay school fees via mobile payment services. Another good point is that people, especially economic operators, resort more and more to mobile payment services to pay taxes and other levies. Official data from the Ministry of Finance show that about CFA10 billion were paid in mobile money taxes in 2021.
Although this measure seems to inflate the government’s coffers, the International Monetary Fund fears it may backfire. The tax came into effect on January 1, 2022, and equates to 0.2% of the amount transferred or withdrawn by any traceable means. These include electronic means, mobile phones, telegraphic means as well as telex or fax. Considered a new revenue stream by the Cameroonian government, this tax has raised concerns in some international financial institutions.
In a report published in March 2022, the IMF indicated that “taxing mobile money can be fiscally inequitable and hinder the current low level of financial inclusion. The poor and unbanked segments of the population, who often live in rural areas and face high transaction costs from the formal banking, are negatively affected by the measure.” Despite this warning from the IMF, the Cameroonian government said it wants to capitalize on the explosion of electronic payments in the country in recent years. The Bank of Central African States (Beac) reported in 2020 that Cameroon alone held 19.5 million of the 30.1 million mobile money accounts recorded in the CEMAC zone. This is 64.8% of the total, three times more accounts than in Congo (7.1 million) and almost 10 times more than in Gabon (2.7 million), during the same year.
"By the number of transactions, payment service providers in Cameroon carry out 73.13% of the community's overall," the Beac said.
Courtesy: CBM
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