Taxing Mobile Money Will Hinder Financial Inclusion


Imposing any form of tax on mobile money transactions will be a major drawback to the financial inclusion agenda championed by governments, Akinwale Goodluck, Head of sub Saharan Africa at GSMA, the global body that represents the interest of mobile operators worldwide, has said.

“I am very concerned anytime there is any indication that government or anybody wants to take any step that may inhibit the growth of mobile money. When you tax mobile money, you are taxing the people who are probably the most excluded in mainstream financial service.

These are people who have found a financial niche in mobile money and taxing it will raise the cost of such a service. There is a strong likelihood that this will be a disincentive for people to use mobile money and it could reduce mobile money adoption and increase the divide in terms of financial inclusion,” he told the B&FT at the GSMA Mobile 360 Series West Africa which came off in Abidjan last week.The idea of taxing mobile money transactions was suggested by the Communications Minister, Ursula Owusu Ekuful, during her vetting by the Parliament’s Appointments Committee in February 2017.

She told the Committee that it may not be a bad option as it will generate revenue for government; though she said government was yet to consider the decision.

Later in the year, the minority in Parliament cautioned the government about the introduction of a tax on mobile money.

Even though the government refuted the claims, industry watchers are wary that the issue is still on government’s mind as it seeks avenues to bridge the budget deficit of about 6.3percent of GDP.

Ghana’s mobile money space has seen consistent growth since it began almost a decade ago. In 2017, the total value of transactions stood at GH¢156billion–representing a 98.5 percent increase from the 2016 value of GH¢78.5billion.

With almost a billion transactions in volume, representing a 78.4 percent rise from 550 million in 2016, the total balance on float has increased by 84.6 percent from GH¢1.3billion in 2016 to GH¢2.3billion in 2017.

With mobile money transactions rising rapidly, government sees it as an easy platform to tax and collect revenue. But Mr. Goodluck sees it as “punitive” and “counterproductive” to the plan to deepen financial inclusion.

“Mobile money is an enabler. It helps financial and social inclusivity. It would be particularly burdensome for anybody to impose a tax on mobile money transactions. The ability of mobile money to impact lives and make a paradigm shift in the way we live in sub-Saharan Africa and in Ghana is unimaginable,” he said.

He instead urged government to take steps to increase the volume and value of mobile money transactions because increasing the depth of mobile money draws millions into the financial ecosystem which broadens the tax base for government.

He believes that government needs to look at the advantage of using mobile money instead of cash.

“Do the traditional means of banking have the same levels of penetration? No. This should be about encouraging the alternative channels, rather than punishing these channels.

Government should continue to look at the mobile system as an enabler and see how to develop the digital economy and use it to create jobs and opportunities. These are the things that should be the focus of attention for governments. Then we can create jobs and happiness for the people,” he said.



Lightweight Google app hits sub-Saharan Africa


Google is set to release its Android Google Go app in Africa, targeted at internet users dealing with issues such as low connectivity speeds, high data costs and smartphones with small memories, media reports stated.

The company first launched Google Go in India in December 2017. The app is the search giant’s latest attempt to expand into emerging markets including sub-Saharan Africa and takes up 5MB of storage, reduces the amount of data needed to display search results by 40 per cent and allows previous searches to be accessed offline.

Google estimates there are some 230 million smartphones in sub-Saharan Africa and this figure will almost double by 2020. Many of the devices have less than 1GB of RAM and very little storage.

The search company partnered with operators MTN Group and Vodacom Group to ensure the app works on 2G networks, and modified its voice function to work better on slow connections.

Google Africa CMO Mzamo Masito said: “Weak data connectivity, high data costs and low storage space often make it hard for people to get the most out of the internet. Google Go is built to handle these challenges.”

The app will be available in 26 countries in sub-Saharan Africa and will be pre-installed on all Android Oreo devices. The company also plans to target other markets, including Brazil and Indonesia.

Earlier this year a light version of Google-owned YouTube’s standard app, designed for emerging markets, was given a full global rollout in 130 countries.

Source: Mobile World Live

Instagram gives users control over data


Photo-sharing social media app Instagram is developing a new data portability tool allowing users to download a copy of the data they’ve posted.

A company representative told Reuters the new feature will allow users to backup data including photos, videos and messages from their accounts. The representative did not provide a release date for the tool.

Implementation of the feature marks a stark turnaround for Instagram, which historically blocked users from dragging or tapping posted images to save them and forced users to turn to third party export apps to secure a copy of their data. However, the move will bring it more in line with parent company Facebook, which has offered a Download Your Information feature since 2010.

The change comes as users look to gain more insight into, and control over, the data platforms collect from them in the wake of Facebook’s disclosure the data from some 87 million user profiles was misused by political data mining company Cambridge Analytica. During testimony before the US Congress, Facebook CEO Mark Zuckerberg said his personal data was among the information exposed in the breach.

Cambridge Analytica denies any wrongdoing.

Source: Mobile World Live