CEMAC: BEAC calls for relaxed taxes on mobile money transactions to facilitate financial inclusion
In its recent report on the state of electronic payment in the CEMAC region in 2020, the Bank of Central African States (BEAC) lobbied for relaxed taxation to allow the development of the mobile money sector.
In its report, the BEAC writes that in its capacity of adviser and facilitator for states’ journey in the digitalization of payment services, it has to warn of the consequence of taxes imposed on electronic money transactions. For the central bank, the main consequence is a slowdown in financial inclusion.
“States, payment providers, and the Beac must have a global and concerted economic approach whose aim will be to allow a broadening and a change in states’ taxation strategy without penalizing the development of electronic payment activities but instead boost the level of financial inclusion and merchant acceptance level (both informal and formal merchants),” the BEAC explained.
This lobby from the central bank comes in a context where, in Cameroon, Mobile money transaction costs have risen several times over the past few years. In 2012, the transactions were free but over the years, fees were enacted. To send or withdraw XAF100,000 for instance, the user has to pay XAF1,800 as transaction cost meaning close to 2% transaction fees. For operators, those transaction costs include taxes. So, according to the BEAC, should that taxation dynamic continue, the mobile money sector could be hindered, therefore, affecting financial inclusion.