The introduction of a 0.05% levy on mobile money and electronic bank transfers in December last year continues to be met with concern and confusion from users, especially with backdated deductions being made recently.
The levy is also seen as a threat to ambitions to digitse the Malawian economy.
Despite the Malawi Revenue Authority (MRA) making the announcement of the levies in January, electronic banking users expressed their alarm on social media, following a series of notifications of the backdated deductions made in February.
The banks later clarified the charges were being applied to all electronic transfers processed from 31 December 2025 onwards.
In January, MRA announced the 0.05% levy on mobile money and electronic bank transfers as part of new income tax measures under the 2026 tax amendments. The amendments are aimed at strengthening domestic revenue generation and included an adjustment of value added tax from 16.5% to 17.5%.
Speaking to ITWeb Africa, digital finance expert Lumbani Gondwe described the introduction of the levies as a ‘double-edged sword’.
He observed that while the government aims to broaden the tax base and create a steady revenue stream, against a backdrop of financial austerity, the levies risk slowing down financial inclusion and the drive to a cashless economy. The cashless ambition is a factor in meeting the government’s 2026 Malawi Digital Economy Strategy.
"For the majority of Malawians, especially in rural areas, mobile money platforms like Airtel Money and TNM Mpamba are the most accessible financial services. However, even a seemingly small 0.05% tax can discourage usage when margins are tight, nudging people back toward cash transactions, and pushing is three steps back in our financial inclusion drive," he said.
The introduction of the levies comes at a time when the country’s registered mobile money subscriber base peaked last year, reaching 20.1 million.
Gondwe added the levies undermine the country's years of progress and initiatives in building trust in digital payment services and further undermines financial inclusion, which government leaders are claiming to promote.
Similar levies have had negative effects in other African countries. Gondwe cited the example of Uganda, where a mobile money tax initially led to a sharp decline in digital transactions.
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