The Ivory Coast has reportedly implemented a tax on all transactions paid with mobile payment applications that has many countries with much larger economies taking notice.
The 0.5-percent tax will be levied against the payor, and is to be collected by the company processing the transaction. It applies to all transfers made through mobile operators and “remittance companies,” like PayPal.
According to Agence de Presse Africaine, the French-language news agency for northern Africa, the new tax is projected to bring in an additional $18.2 million a year to the government treasury. And while that may seem like a tiny amount of money, The Ivory Coast’s annual government budget is only $7.14 billion a year.
The U.S. federal budget for the current fiscal year is $4.15 trillion, by comparison.
The Ivory Coast is struggling to control its national debt, and the tax is seen as a way to bring in additional revenue. The government’s biggest struggle, however, is keeping track of the amount of money flowing through mobile pay systems inside its borders.
It is not the first African country to impose the “mobile tax.” APA reports Kenya, Tanzania, and Ugana all impose 10-percent taxes, while Zimbabwe has imposed a flat surcharge on every mobile transaction.