Malawi Govt Withdraws Mobile Money Tax
18 October 2019
Joseph Mwanamvekha, Malawi's honourable Minister of Finance, Economic Planning and Development has confirmed the Malawian government's withdrawal of the 1%withholding tax that had been imposed on mobile money transactions.
Mawanamvekha said that although this measure is in line with the policy developments in neighbouring countries, Malawi's government has, however, decided to withdraw the proposed tax.
Telekom Networks Malawi (TNM), the nation's leading mobile phone operator, Malawi Confederation of Chambers of Commerce and Industry as well as the Consumer Association of Malawi (Cama) were among the organisations that had lobbied the government to withdraw the tax.
The CEO of TNM, Michiel Buitelaar, had corresponded with Mwanamvekha and said that the tax would increase consumers' transaction costs by a minimum of 25%.
Buitelaar said that if the 1% transaction cost were to be implemented, a basic fund transfer transaction would result in a cost increase of no less than 25% for the consumer, with the cost still increasing further as the balance still stood to be taxed for all other transactions.
Cama's Executive Director John Kapito said that the tax had the potential to throw most average income earners into poverty, especially the ones who are unbanked but depend on the services of the mobile money wallet.