Benin’s existing 5% tax on digital services will now also be applied to mobile money operators, making the West African country the latest in the region to do so.

Recently, Tanzania, Uganda and Zimbabwe announced similar action.

Ghana is also pushing for the introduction of a 1.75% tax on digital and mobile money services, while Cameroon introduced a similar 0.2% tax on mobile wallet transactions on 1 January .

The government of Benin has confirmed that there is no new tax, but mobile money operators are now officially eligible to pay the existing levy.

Nicolas Yenoussi, Director General of Taxes, said: “The 5% contribution on electronic services is … a contribution that has existed since and what has been done with the new general tax code is to widen the scope of this contribution to money transfer operations by mobile telephony.”

Financial experts added that the country is charging tax on transaction charges levied by operators.

Didier Mary, an independent consultant focused on digital transformation in Benin, said, “Transforming telcos into tax collectors is a very bad idea that is not warranted.”

The case in Zimbabwe has also been raised.

The Southern African country recently announced a US$50 levy on smartphones that are shipped into the country without payment of import duty.

Mary said, “Due to their mobile license, they don't have any other choice. They have to apply the tax on transactions, collect it and pay the govt. They're voluntary prisoners … or might get into troubles.”

Mobile money is becoming increasingly popular in Benin and the expectation is that more Fintech platforms and partnership, including banks, will be launched this year.

Benin has previously tried to impose another digital tax on data spent by consumers. However, the initiative was heavily criticised online, with the #TaxePasMesMo trending for days.