Govt hailed for reversing decision on mobile money tax


Consumers Association of Malawi (CAMA) has hailed Malawi Government for its decision to withdraw the proposed one percent withholding tax on non-bank mobile money transactions.

In his budget statement last month, Finance Minister Joseph Mwanamvekha introduced a one percent withholding tax on mobile money, a decision that was condemned by CAMA, through its Executive Director John Kapito.

Kapito: Has hailed government

CAMA then threatened to take action if the decision wasn’t reversed, claiming that introducing tax on mobile money transactions was adding more misery on poor Malawians who are already suffering due to some policies.

Mwanamvekha finally bowed down to CAMA’s demand as he announced the withdrawal in Parliament on Monday.

And reacting to the news, Kapito, through a press briefing on Wednesday, said the withdrawal of this tax has a positive impact on the livelihoods of many Malawians who uses mobile phones as a means of financial inclusion.

“First of all, let me thank the Finance Minister for deciding to reverse Government’s earlier decision. When I consulted him, he developed much interest and he was quick to listen to us and I wasn’t surprised to hear that the decision was reversed.

“Most Malawians are now using mobile phones for a number of transactions which include savings but also for paying bills for various services, the mobile phone networks also provide employment to a large number of Malawians mostly women and whose income is dependent on transactions by mobile phones. The removal of this tax will have a positive impact on livelihoods of many Malawians who prefer using mobile phones for various transactions,” he said.

However, Kapito said that his association will continue lobbying for the regulation of transaction fee, which remains high.

“We have won the first battle now our focus is on lobbying Government to regulate how these mobile service operators deduct money in a form of transaction fee whenever Malawians send or withdraw money from their mobile wallets. As it is, the transaction fee remains high and it’s not healthy at all to the majority of Malawians who relies on mobile money,” he explained.

Government wanted to introduce the withholding tax to ensure that a large number of citizenry are motivated to contribute towards national building through payment of taxes and ensure that Government has scope to improve service delivery.