Panic Withdrawals Hit Mobile Money Nationwide Over Obnoxious 1.75% Tax

The reverse in gains towards the goal of a cashless society in Ghana has already begun as reports coming in indicates that angry Ghanaians are having a “run on the bank” to close their mobile money (MoMo) accounts which had been slapped with 1.70% tax per transaction. 

Across the country, Ghanaians are said to be rushing to withdraw their monies ahead of Parliament’s approval of the 2022 budget which carries what has widely been condemned as an insensitive new tax on the poor.

Mr. Charles Adu, the National Public Relations Officer for Mobile Money Agents Association (MMAA), has confirmed the panic withdrawals saying the new tax is setting the country back.

“We are already overwhelmed with existing taxes and other unbearable production costs, adding additional taxes will not only overburden the suffering masses. It will also collapse our business,” he stated.

Reportedly, the MMAA has called for an emergency meeting over the controversial new tax and will soon issue a communique over the issue.

On Wednesday, Finance Minister, Ken Ofori Atta, announced the new tax while presenting the 2022 budget statement in Parliament.  

The Electronic Transaction Levy proposed will introduce a 1.75% tax on every momo transaction above Ghc100. The 1.75% new levy adds on top an already existing 1% service fee that mobile money operators charge.

The tax has attracted criticism of the government as mobile money transactions have been the most effective electronic platform for capturing Ghana’s notoriously unbanked private sector. Market women are the heaviest users of momo.

Also, the government’s charge of 1.75% means it is taking more tax on momo transactions than even the operators themselves.

Meanwhile, the announcement of the tax has made Vice President Bawumia reaffirm his credibility crisis following pronouncements to the contrary months ago.

In 2020 Bawumia who heads the Economic Management Team had promised that momo would not be taxed, saying it made no sense because the users of the MoMo services were predominantly poor people.