Zambia ties up tax loophole with new levy on business mobile money transactions
The Zambia Revenue Authority (ZRA) plans to tax mobile money transactions by businesses, similar to that applied to banks.
ZRA board chairperson Caleb Fundanga said, “Most businesses in the country use mobile money in order to avoid paying tax applied to Visa card transactions (in which case the money is transferred directly into a bank account linked to the Taxpayer Identification Number (TPIN).”
Fundanga was quoted by the local News Diggers newspaper as saying, “So the next stage will clearly be how we can incorporate mobile money transactions that go into accounts of this company so that even mobile money transactions can also be captured for tax payment.”
“They (businesses) realise that when you use mobile money, it won’t be captured for tax payment but we will now be engaging to ensure even mobile money transactions can be captured in the same way you can capture transactions that go into bank accounts. These are obvious areas we are investing in to try and ensure that every transaction can be captured. But at the moment, that has not yet happened.”
According to statistics from the Zambia Information and Communication Technology Authority (ZICTA), the number of active mobile money subscribers increased from 8.6 million in 2020 to 9.9 million in 2021.
The report said the volume of mobile money transactions also increased from 746.5 million to 843.1 million, representing an annual increase of 11.7%. The value of transactions grew from ZMK105.6-billion in 2020 to ZMK169.4-billion in 2021, representing a growth rate of 60%.