Cameroon’s 0.2% mobile money tax on transfers and withdrawals, enforced in January 2022, could backfire according to a report released by the International Monetary Fund (IMF).

The 2022 Finance Law of Cameroon applies the tax to all electronic money transfer transactions, but not to bank transfers as well as payment of other taxes, duties and levies.

The government expects to generate 20-billion francs CFA from this legislation, but it has not been welcomed by everyone, as reported by ITWeb Africa.

Economists at IMF Roberto Piazza and Jean-Francois Wen contributed to the report and warned that the introduction of a tax on mobile as seen in several African countries - including Tanzania (2021), Ghana (2021), Congo (2019), Malawi (2019), Côte d’Ivoire (2019), Kenya (2018) and Uganda (2018) - “need to be carefully weighed.”

The experts asserted that when the tax is not applied to the banking sector, it results in an unequal treatment of different means of payments. “Taxing mobile money can be fiscally inequitable and hinder the current low level of financial inclusion,” they stated in the report.

Economist and tax expert Dr Jean-Marie Biada thinks the mobile money tax is not problematic as the rate (the lowest among all other taxes in the general tax code of Cameroon) is too minimal.

Biada said the move to tax transfers (consumption tax) and withdrawal (income tax) would ensure fiscal equality.

He was quoted by La Voix du Kaat as saying: “The state is in need of money. Don't forget that since 2016, Cameroon has been again on a structural adjustment programme of the IMF. This necessitates the broadening of the tax base.” He insisted that the tax is not astronomical.

The IMF has indicated that cyber-attacks on critical financial, transport or communication infrastructure as well as on private and public bodies could trigger "systemic financial instability or widespread disruptions in socio-economic activities."

Bretton Woods Institutions placed Cameroon's risk level at ‘Medium’, with 30% of occurrence.

IMF has called on the country's government to boost investment in IT systems and increase awareness of cyber security.