Mobile money is expanding rapidly in Senegal and has become an essential tool for millions of citizens. The government’s decision to introduce a tax on these transactions marks a turning point. While it promises fresh revenue for the state, it also raises concerns about its impact on financial inclusion and the informal economy.

During its September 17 session, the National Assembly adopted three draft laws presented by the Minister of Finance. Among them was Draft Law No. 17/2025 amending Law No. 2012-31 of December 31, 2012, which forms the General Tax Code. This amendment introduces taxation on digital financial services, including mobile money transfers and merchant payments. From now on, each money transfer made by individuals or companies with a merchant code from mobile operators will be subject to a 1% tax, excluding those already registered with the Large Enterprises Directorate or the Medium-Sized Enterprises Directorate. In addition, a 0.5% levy will apply to money transfers (TTA). The law only awaits promulgation by the President and publication in the official gazette before it comes into force.

The state’s big ambitions

Through this taxation, the government aims to raise nearly CFA230 billion over three years to support its 2025–2028 Economic and Social Recovery Plan, presented on August 1, 2025, by Prime Minister Ousmane Sonko. The plan is valued at CFA5,667 billion (about $10 billion). In a difficult economic environment, this “national effort” is expected to help optimize public revenue and reduce a budget deficit estimated at 14% of GDP in 2024, with public debt reaching 119% of GDP. According to the Minister of Finance and Budget, taxing mobile money will provide the state with new resources to limit borrowing while strengthening its capacity to fund national development. He also stressed that it is a matter of fairness and tax justice. At the National Assembly, he said that if all sectors of the economy pay taxes according to their capacity, then the digital sector should not be exempt.

Yet the move to tax the sector has sparked unease among service providers and consumers alike. It continues to fuel heated debate across the population. Many argue that what is expected from the new government is an improvement in living conditions, not added burdens. The biggest concern is that fees for mobile money, now a daily necessity, will rise.

A service in demand

In less than a decade, mobile money has become a crucial financial service for daily transactions in Senegal. According to the Financial Services Quality Observatory (OSQF), fewer than 30% of the population hold a traditional bank account. Mobile payment services such as Orange Money, Wave, and Free Money have become the “people’s bank,” used by millions to send money, pay bills, support small businesses, and save.

In its July 2024 report “Mobile Money and Its Macroeconomic Effects in Senegal,” the General Directorate of Planning and Economic Policy, under the Ministry of Economy, Planning and Cooperation, noted that 86.35% of people aged 15 and older held an electronic money account.

The Global System for Mobile Communications Association (GSMA) reports that between 2013 and 2023, the number of registered mobile money accounts in Senegal more than quintupled, rising from 7 million to 38 million. Mobile money penetration increased from 45% to 210%. Over the same period, the value of transactions multiplied 3.3 times, reaching $230 million (CFA128.3 billion) in 2023.

GSMA further highlighted that by the end of 2023, Senegal’s GDP was $6 billion higher than it would have been without mobile money—an increase of 26% compared with the previous year. This amounted to an 8.6% GDP boost attributable to mobile money, a contribution comparable to that of the construction, real estate, and services sectors. Mobile money’s impact on the Senegalese economy in 2023 was twenty times greater than in 2013 (0.7%).

Its impact was also significantly higher than the mobile money contribution across Sub-Saharan Africa, which stood at 4.5% in 2023. At the individual level, mobile money raised per capita GDP (PPP 2017) by $300 in 2023, nearly fifteen times higher than in 2013. For industry players, taxing mobile money risks breaking this momentum and undermining its contribution to financial inclusion.

Strangling a growing sector

ICT professionals, some operators, and many consumers warn that the tax could hurt Senegal’s mobile money market. They fear discouraged users, falling transaction volumes as people revert to cash, and declining trust in the system. This could weaken an entire ecosystem that has been expanding rapidly.

According to the Organization of ICT Professionals of Senegal (Optic), “Taxes on customer transactions, applied as a percentage of the transfer amount, are generally passed on to tariffs and ultimately borne by customers. In countries where they were introduced, they led to higher living costs and reduced purchasing power. Taxes applied directly on operator revenue or margins are borne by operators themselves. These often led to reduced investment, cost-cutting strategies, sharp cuts in distributor commissions, and even job losses.”

Beyond the numbers, the tax also raises a social issue. Mobile money has allowed millions of people excluded from the traditional banking system to join the modern economy. Small traders, migrants sending remittances, young entrepreneurs—all rely heavily on these services. Taxing such transactions amounts to indirectly taxing the poorest, those without bank accounts or alternatives.

A trader interviewed at Dakar’s Sandaga market summed up her dilemma: “I use Wave to collect payments from my customers. But if we must pay a tax on each withdrawal, I will ask people to pay me in cash. Otherwise, I lose money no matter the amount.”

GSMA also warned that mobile money supports inclusion in other sectors such as agriculture, education, energy, and health. Taxing transactions is likely to harm each of these sectors.

A matter of compromise

Rather than taxing transaction volumes, the Senegalese Association of Payment Establishments and E-Money Issuers (ASEPAME) has proposed a different approach, one it considers less harmful to the market. The group suggests taxing operator revenues at a rate of 2.5%. According to its calculations, this method could generate more than CFA530 billion over three years.

The professional body explained that “this approach would directly generate CFA43 billion through the new levy over three years. More importantly, by preserving sector growth, it would allow existing taxes (TAF, VAT, corporate income tax, payroll taxes) to yield an additional CFA489 billion. The total of CFA530 billion would far exceed the government’s target of CFA230 billion.” ASEPAME’s proposal is based on the economic logic that taxing users reduces activity and shrinks the tax base, while taxing operator revenues has no impact on service use.

Finance and Budget Minister Mamadou Moustapha Ba countered that taxing provider turnover would only yield about CFA5.25 billion, far below the goals set under the new formula. However, he said he remains open to further discussions with operators on any new proposals.