Finance Minister blames service providers, says high charges discouraging growth of mobile money sector


Finance and National Planning Minister, Situmbeko Musokotwane, has accused mobile service providers of discouraging further growth of the mobile money sector following their high charges on transactions which go up to K100.

Responding to a “bash” from stakeholders on his proposal to introduce levy on mobile money transactions in 2024, the Minister said mobile service providers should be the ones receiving the push as their charges were high.

The proposed levy ranges from K0.08 to K1.80.

Stakeholders during the National Symposium on the 2024 budget in Lusaka on Monday shared their views on the development.

While some advocated its removal, others were for its introduction.

But Musokotwane in his response claimed that he was only proposing for a maximum of K1.80 as opposed to charges from service providers which were as high as K100 for certain transactions.

Read more: Association raises concerns over introduction of levy on mobile money transactions

“You may have noticed that the rate of taxes is really very small, the lowest is 0.8 ngwee which is very small. In fact, the ones that we should be pushing very hard are the service providers who, in certain cases, charge as much as K100 for a transaction, we are only getting a maximum of K1.80

“So if there is anyone who is discouraging this industry is the providers themselves not government,” Musokotwane said.

Zambia chamber of commerce and industry (ZACCI) president, Anthony Kabaghe, in his submission advocated the removal of the levy as it would translate into added costs to consumers who already pay high transactional fees.

“ZACCI appreciates governments rationale for this measure. However, it may undermine the strides already made in creating a cashless society and attaining financial inclusion.

“We therefore suggest that this measure be removed because it will translate into added costs to consumers who already pay high transactional fees,” Kabaghe said.

On his part, Economic Association of Zambia (EAZ) president, Isaac Ngoma, submitted that the matter be revisited as high transactions charged would work against the go cashless strategy that the Central Bank is using.

Ngoma called for interrogation of the proposal.

Meanwhile, Jason Kazilimani, KPMG Senior Partner said: “the levy on mobile money transactions yes, on one hand I think it will probably hit some people’s pockets but on the other hand, I think the bigger issue is that it is one way of increasing the tax base.”

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