Sam George cautions gov’t against taxing mobile money operators
A Member of Parliament’s Communication Committee Sam George has warned that Ghanaians will soon suffer the implications of a new tax to be imposed on Mobile Money Operators.
The Communications Minister, Ursula Owusu Ekuful at a Meet-the-Press series on Thursday disclosed that talks are ongoing to ensure that mobile money operators pay taxes on the transaction fees they charge users.
According to her, there is the need to charge taxes on the over GH?70 million the operators gain from transactions in order to gain more revenue for the country.
“For mobile money monitoring, the Common Platform has reported an average monthly usage of GH?29.1 billion, 195.8 million transactions with GH?71million generated by the operators in transaction fees each month. This is of particular interest to me but this is where the Finance Minister and I diverge because I think that that GH?71 million which is generated by the operators in transaction fees, they ought to pay taxes on that revenue to the state,” she stated.
But Sam George who is also the NDC Member of Parliament for Ningo Prampram said this mobile money tax was something he had predicted already and does not come as a surprise to him now that it has been declared by the Communications Minister.
Citing the talk tax as an example in an interview with Citi News, he said that any tax that is introduced by government always has the end-user paying for it, whether directly or indirectly.
“I remember on the issue of the budget [while speaking to Citi News earlier] I mentioned that I won’t be surprised to see a tax on Mobile Money in one form or the other. The Minister has made it clear that as Minister for Communications, her preoccupation is to impose a tax on Mobile Money on the operators.”
“One thing you must always bear in mind with telecos is that the MNOs always find a way of passing on every cost that government imposes on them to the end user. So when government increases CST, today we are paying for it as the end-user. So if government thinks that they are only going to be taxing the MNOs, we need to be very careful because ultimately, the end-user will pay for it,” he said.
The idea of taxing mobile money transactions was first suggested by Ursula Owusu Ekuful, during her vetting in February 2017, where she said it may not be a bad option to generate revenue for the government.
But Ursula at the time added that government was yet to consider the decision.
This caused a bit of uncertainty among users of mobile money and merchants who kicked against the move.
Sam George opposes directive to stop instant deductions of CST
When the Minister for Communications issued a directive to the telecommunication companies to cease the instant deductions on the Communications Service Tax, Sam George was opposed to it, accusing the Ministry of “extortion on a national scale”.
Following the increment of the CST from 6% to 9% the telcos introduced an instant deduction of the tax.
The Communications Ministry in its directive ordered for the cessation of the upfront deductions and also said the CST should be treated the same way as VAT, NHIL and other levies are treated.
But Sam George described this as an act of intimidation on the telcos, reminding the Ministry that the CST was a consumer tax and should not be treated as a corporate tax.
Mobile money tax may happen in the future
A Deputy Minister of Finance, Kwaku Kwarteng, a year ago had hinted that the government may consider taxing Mobile Money operators in the future.
Having already made some remarks that gave the impression that, that idea might be considered, he, however, added that, even “if at all government is minded to introduce any taxes related to mobile money, the government would do so sensitive to the consequences and would make sure that the balance is right.”
No new taxes in 2020
The government had promised not to introduce any new taxes in 2020.
As part of the 2020 budget presented on Wednesday, the Finance Minister Ken Ofori-Atta indicated that the government will work with the existing tax systems to meet its revenue targets, contrary to the view of the opposition that the 2020 budget was going to contain a myriad of new taxes.