Malawi – FINANCE MINISTER WITHDRAWS 1% TAX ON MOBILE MONEY

Yesterday evening, Finance Minister Jospeh Mwanamvekha withdrew the proposal of 1% tax on all non-bank mobile money transactions. Succumbing to pressure, the minister has received backlash from various entities, which did not approve of the 1% tax.

Recently it has been learnt that Telekom Networks Malawi (TNM) plc has wrote to the Finance Minister, arguing that should the 1% tax be implemented on mobile money transactions, consumers’ transaction cost by at least 25%.

TNM plc chief executive officer Michiel Buitelaar, outlined in the letter that tax will slow down growth of the mobile money ecosystem. He said that the mobile communications sector is already burdened with higher taxation in excise tax, withholding tax on commissions, income tax, pay as you earn, Tevet levy and value added tax.

According to the finance minister, the development was aimed at ensuring that a large number of citizens are motivated to contribute towards national building through payment of taxes and ensure that Government has scope to improve service delivery. However, Cama Executive Director, John Kapito argued that an already destroyed structure cannot be developed. Kapito stressed that Cama will fight for these people as the tax will affect them is parliament passes the budget as it is. “I think our fight will be re-energized to the point where we will be on the street every day. Our role is to make sure that tax does not come in at all and that the people we are seeing out there do not lose their jobs,” he said.