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Zambia considers taxing mobile money transactions starting next year

Zambia considers taxing mobile money transactions starting next year
Wednesday, 04 October 2023 19:21

Digital payment services are growing rapidly in Zambia. In 2022, mobile money transactions reached a value of 170 billion kwachas in the country, compared with 95 billion kwachas in 2021.

The Zambian government is considering introducing a tax on mobile money transactions. The proposal was made last week by Situmbeko Musokotwane, Minister of Finance and National Planning, during the presentation of the 2024 national budget.

The proposed tax applies only to person-to-person transactions. It varies from 8 ngwee ($0.0038) to 1.80 kwacha ($0.085), depending on the value of the transaction.

According to Felix Mutati, Minister of Technology and Science, Mobile Money transactions in Zambia reached 170 billion kwachas ($8 billion) in 2022, against 95 billion kwachas in 2021.

With the new tax, the government wants to "ensure that everyone contributes something, however small, to the provision of public services." However, industry players believe the measure will have adverse effects, particularly on the informal sector.

"The introduction of a tax on mobile money will mean that people will pay more. For those on lower incomes, every ngwee counts, a lot of explanation is needed," Postle Jumbe, president of the Alliance of Zambia Informal Economy Association (AZIEA), told local press.

In recent years, Zambia has been experimenting accelerated digital transformation marked by the rapid adoption of digital payment solutions. 

Isaac K. Kassouwi

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