MoMo Agents to transfer the 10% cost to the customer

Mobile Money agents across the country are kicking against a 10% tax being imposed on their earnings by the government.

The agents at an emergency meeting on Friday June 25, 2021, said they can no longer bear any extra financial levy on their operations.

In a communiqué following the meeting, the Mobile Money Agents Association of Ghana (MMAG) said all efforts to engage the government and stakeholders on the tax have not been successful.

The government, in a new directive, has asked telcos to deduct a 10% tax from the cash-out service of MoMo agents.

According to the association, the government’s action means that, they will now be paying a total of 20% tax on a monthly basis, which does not auger well for the sustainability of their businesses.

“The Union cannot cooperate with this directive given to the Telcos by the government to deduct 10% extra from our cashout services wallet.”

“In total, on each network, every Agent will be paying 20% tax on a monthly basis. Initially, Agents pay 5% on cash-in Service wallet, but it was secretly increased to 10% without our knowledge. We feel this is a gross disregard to procedures,” the Association said.

They said besides the many other financial obligations on them such as cost of utilities and tax, acquisition of operating permit and payment of social security for employees and the cost of labour, they are also saddled with different challenges such as armed robbery attacks and fraud which nearly collapsed their businesses to especially amidst the COVID-19 pandemic.

The Association said its members pay about nine different taxes, and that should the new tax be imposed, they would struggle to keep up.

“No business can survive in such an environment…There is no business in Ghana that is made to pay nine different taxes, only a small business like MoMo aside our operational cost”

Evans PK. Otumfuo, the General Secretary of the association who signed the statement, said while the association is not enthused about the development and is not interested in burdening their customers, however, it has no option but to push the cost unto the customers.

“Management is by this press informing all MoMo Agents to transfer the cost to the customer. It is not in our interest to get to this point, but there is no room for options, hence our action.”

It is unclear how the operators intend to shift the tax burden onto their customers, however they say they will issue a new pricing module for their services on Monday, June 28.

“The new pricing will be out by Monday 28th June, 2021,” they added.