Mobile money tax will increase thefts – economist
By Tony Nkhoma
THE implementation of the mobile money transaction levy will undermine the gains made in financial inclusion, transparency and security, economist Dr Esther Banda has said.
Dr Banda told the Mast in an interview the proposed tax would push people to revert to using cash, which could trigger an increase in theft in the country.
She joins other experts who have expressed alarm over the tax.
“Cash transactions are harder to track, increase the risk of theft and weaken efforts to formalise the economy. Small traders who rely on fast mobile payments may also see reduced efficiency and higher operating risks,” Dr Banda said.
She urged government to take seriously the concerns from various key stakeholders on the mobile money transaction levy.
Dr Banda said mobile money service had grown largely because it was affordable, convenient and trusted, especially by low-income users and small informal businesses.
“The concern that a mobile money transaction levy on person-to-person transfers could push people back to cash is valid and should be taken seriously,” she said.
Dr Banda said if the levy was modest, well-communicated and structured to protect low-value transactions, its negative effects can be minimised.
“When transaction costs increase, and the cost of doing business is increased these users are the first to feel the impact. If the levy significantly raises the cost of everyday transfers, many people may indeed revert to cash to avoid fees,” Dr Banda said.
He said exemptions or lower rates for small transfers, alongside incentives for digital payments, could help preserve confidence in mobile money systems.
“In my view, policymakers should aim for a balance: raising revenue without discouraging digital financial services. Mobile money is not just a payment tool; it is critical economic infrastructure,” she said.
Dr Banda said pushing people back to cash would be a step backward.
Any levy should be carefully calibrated to avoid doing more harm than good.
