• Evidence shows mobile money taxes reduce usage and revenue

• Most countries exceed the 0.2% threshold that triggers cash fallback

• Policies risk hurting financial inclusion and long-term growth

Across Africa, governments keep turning to the same idea: tax mobile money to raise revenue. The outcome is just as consistent—lower usage, disappointing returns, and a shift back to cash.

Ghana’s experience captures the pattern. In May 2022, authorities introduced a 1.5% levy on electronic transactions to ease fiscal pressure. The result was immediate—but the opposite of what was intended. Users quickly adjusted. Transactions fell, many bypassed the system, and revenue came in below expectations. The rate dropped to 1% a year later. By 2025, the tax was gone.

And this example is not an isolated case. Tanzania, Uganda, and Kenya all tested similar policies—then adjusted or rolled them back. In Uganda, a study by the UN Capital Development Fund found that within two weeks, 47% of users stopped using mobile money, while some merchant payment segments saw transaction volumes fall by as much as 60%.

Instead of drawing a continent-wide lesson, other governments pressed ahead.

That pattern is documented in a March 2026 report by the GSMA and reinforced by an IMF working paper. Their conclusion is clear: these taxes raise little, cost more, and hit the poorest first.

A fragmented tax landscape; even within WAEMU

By the third quarter of 2025, about 20 sub-Saharan African countries had introduced some form of mobile money tax. The approaches vary widely: some tax transaction values, others operator fees, and others total platform revenues.

Even within WAEMU—created to harmonize economic policy—there is no common approach. Benin taxes transaction fees at 5%. Mali applies a 1% levy on withdrawals. Côte d’Ivoire taxes operators’ revenues, a less visible but still impactful model. Other countries in the bloc have followed. No coordination, no shared doctrine—each country applies its own rules to a system that crosses borders by design.

The threshold governments consistently exceed

The GSMA has done the kind of analysis finance ministries should have completed before introducing these taxes. By combining pricing data, transaction volumes, and user behavior across five countries, the report identifies a clear tipping point: once a tax exceeds 0.2% of a transaction’s value, users begin to change behavior in measurable ways, often shifting back to cash.

An IMF working paper (WP/25/255), based on actual transaction data, reaches the same conclusion. In Cameroon, the first five months after the tax was introduced in 2022 saw a 40% drop in the average monthly value of taxed transactions per user. In the Central African Republic, a 1% levy introduced in April 2024 led to a 51% decline in monthly transactions per user.

The estimated price elasticity is -2.1, meaning a 10% increase in cost results in a 21% drop in transaction volume.

Research from the International Centre for Tax and Development shows these taxes are regressive. Small transactions—those made by low-income households and micro-businesses—carry a heavier burden than larger transfers. Rather than capturing new revenue, governments risk pushing users back to cash and reducing the traceability of economic activity.

Most countries that introduced these taxes are well above the 0.2% threshold, meaning the negative effects are not incidental—they are structural.

The impact is also uneven. Across the countries studied, women are 8 to 16 percentage points less likely than men to own a mobile money account. Higher costs reduce access first for those with the fewest alternatives.

Short-term revenue, long-term loss

Governments expect large revenues—often in the hundreds of billions of CFA francs. But this overlooks a key trade-off. According to GSMA estimates, a 10-point increase in mobile money adoption can add between 0.4% and 1% to annual GDP. Slowing adoption reduces future tax bases.

Zambia offers a cautionary example. After doubling its mobile money tax in January 2025, it saw weaker corporate tax revenues as digital activity declined.

Tax cash, not digital

Alternatives exist. In March 2026, BEAC Governor Yvon Sana Bangui proposed shifting the burden to cash, making digital payments more attractive rather than more expensive. Kenya has taken a different route by digitizing tax collection itself, using a platform that now processes the equivalent of about one billion shillings daily.

Africa has spent two decades building one of the world’s most advanced mobile payment ecosystems. According to GSMA, it accounts for the majority of global mobile money transactions. Some countries have begun to reconsider. Chad plans to remove its tax. Ghana already has. Gabon rejected a similar proposal in parliament.

These reversals are not failures. They are late corrections. For countries still considering such taxes, the evidence is clear: the cost of repeating the mistake may outweigh the revenue it promises.

Fiacre E. Kakpo