Presentation on a study that investigated the intricate dynamics surrounding the implementation and reception of mobile money taxes, focusing on Ghana as a case study. Presented at the GRA & ICTD conference "Taxing Mobile Money: Lessons and Ways Forward"

1. PARTNERS
Mobile Money Taxes:
Knowledge, Perceptions and
Politics. The Case of Ghana
Mary Abounabhan, Awa Diouf, Fabrizio Santoro,
Carlos Sakyi-Nyarko and Celeste Scarpini
DIGITAX Programme

2. Overview
Context, Literature, Motivations
Data and Methodology
Results
Conclusions

3. Context, Motivations, Objectives

4. A growing trend of
taxing DFS
• DFS, mostly MoMo, are rapidly
expanding in Africa
• Around 10 Africa countries apply a tax
on fees, values or turnover
• With different structure and target, but
broadly the same objective

6. Values of
monthly
transactions –
GHc Thousand
per person (15
and above)
ids.ac.uk 6
Announced
In
Force
Announced
Revision
Revised
0
1
2
3
4
5
6
2
0
1
9
m
1
2
0
2
0
m
1
2
0
2
1
m
1
2
0
2
2
m
1
2
0
2
3
m
1
Sending
Receiving
Payments
Withdrawals
Values
An initial drop in values at implementation followed by a
recovery at reviewed rate

7. Price is not enough to understand why people
make certain choices
• Studies on perceptions of mobile money taxes and Ghana's E-levy
• Examine behaviour based on price sensitivity and aggregate data (assume perfect
knowledge)
• Limited studies in Ghana (population, time frame, other contexts)
• Knowledge, perceptions and tax behaviour (larger focus on direct taxes)
• Likelihood for biased perception of tax and its distorting effect on decision making
(McCaffery, 2004; Fochmann et al 2010)
• Mixed findings on the role of tax knowledge and perceptions of tax fairness (Tan et al
2007; Mukasa, 2011; Eriksen and Fallan 1996)
• Taxes vs prices and consumer behaviour
• Consumers are likely to have a desire to avoid a tax that exceeds rational economic
cost avoiding behaviour. (Sussman et al 2019; Slemrod et al 1996)

8. Research Questions
• (i) What are people’s perceptions of
the e-levy one year after
implementation, and what are factors
associated with perceptions?; and
• (ii) How may perceptions of mobile
money taxes correlate with how people
use mobile money?

9. Knowledge
of e-levy
design
Sentiment
towards the
e-levy
behavioural
change
• Political
affiliation
• Demographics
• Specified
merchant
status
• Threshold
• Exemptions

10. Data and Methodology

11. Focus Group Discussions & Interviews
INTERVIEWS WITH KEY
STAKEHOLDERS
10-15 FGDS WITH ABOUT 6-8
RESPONDENTS IN EACH

12. The Survey May 2023
• 1500 individuals and households
• Nationally representative
• Household and individual level
information and consumption
patterns (4 rounds of phone
surveys)
• Demographics, Perceptions,
knowledge, and behaviour
Original
survey
questions
and
structures
Time
frame
1Year after
Unique
population

13. The advisory
group
Ghana Revenue
Authority (GRA)
Ghana Chamber of
Telecommunications
Mobile money
Agents Associations
(MMAA)
Center for
Economics Finance
and Inequality
Studies (CEFIS)
Women in Informal
Employment:
Globalizing and
Organizing (WIEGO)
International Centre
for Tax and
Development (ICTD)

14. Results

15. 96%
2%2%
Who is your main mobile money provider?
MTN Vodafone AirtelTigo
7%
86%
7%
Have you ever used mobile money?
No Yes, mobile banking Yes, mobile money Yes, both
Mobile money is widely adopted by the population

16. 86%
Yes
Heard about e-levy
41%
34%
7%
14%
How did you first hear about the elevy?
TV
Radio
Social media
Relatives, friends
Work
Government reps/communication
Mobile money agent
Other
Who knows about the e-levy?

17. Small test: What do you know about the e-levy ? What about our sample?
• May 2022
Implementation date
• January 2023
Modification date
• 1.5%
Tax rate at implementation
• 1%
Tax rate after modification
• 100 cedis
Daily threshold for momo transfers
• 20,000 cedis
Daily threshold for bank transfers
• TRUE
Applied to sending
• FALSE
Applied to receiving
• TRUE (with conditions)
Applied to payments
• FALSE
Applied to deposits
• FALSE
Applied to withdrawals
23%
16%
9%
19%
37%
0.1%
93%
80%
23%
95%
77%

18. I have paid through a
merchant account but because
I have the mind that I was
paying the e-levy I did not
really look at that statement.
I don't check.
I first deposit the money
onto my wallet before
sending so that I avoid
paying the E-levy.

19. Knowledge of rate, knowledge of threshold, demographics, and
political affiliation influence overall agreement

20. How did
people cope
with the e-
levy?
56% did not change their behaviour
Frequency
Frequency of coping strategies

21. The more individuals agree with the tax the less likely they are to
change their behaviour

22. I have not changed my
behaviour because I don't
understand how it works.
We need education.
I have withdrawn all my monies
from my momo wallet. Currently,
I don’t even have a pesewa on it.
My understanding is that I
will be charged e-levy irrespective
of the transaction.

23. Conclusions
•Despite widespread awareness, there's limited understanding of key elements like tax
rate, daily threshold, and exemptions related to the e-levy.
Knowledge Gap:
•Strong negativity prevails among the public regarding the e-levy, irrespective of the
limited knowledge about its specifics.
Negative Public Sentiments:
•Knowledge about specific tax design elements influences public agreement levels, both
positively and negatively.
Tax Design Influence:
•Political affiliation and perceptions of the e-levy as a driver of national development
consistently impact public agreement.
Political Dimensions:
•Higher agreement levels associate with a lower likelihood of reported behavioral changes,
However political affiliation is not significantly correlated with behavioural change.
Behavioral Change Paradox:
•Focus group discussions reveal that perceived increased use or return to previous
patterns is attributed to the embedded nature of mobile money in daily life.
Embedded Nature of Mobile
Money:

24. Enhance Public Agreement through Robust Communication:
The e-levy is widely known, but widely misunderstood. These
misunderstandings affect behavioural responses.
Addressing key misconceptions and gaps in knowledge could
(1) increase acceptance
(2) ensure people benefit from features designed to make the
tax more equitable
Prioritize Welfare of Vulnerable Populations:
Acknowledge the embedded nature of mobile money in daily
lives and prioritize the welfare of vulnerable populations in tax
policy design.
Policy considerations

25. PARTNERS
Thank you for listening

26. How do we measure agreement?
• Index of general agreement
• How much do you agree with the
introduction of the tax
• How much do you agree with the
current rate of the e-levy?
• How satisfied are you with the
exemption threshold?
• How fair do you think the e-levy is?
• How transparent do you think the
usage of revenue from the e-levy is?
• Do you think the e-levy can achieve
these purposes?
• How satisfied are you with the policy
change?
How do we measure knowledge?
• Index of knowledge
• Implementation date
• Modification date
• Current daily threshold for MM
• Current daily threshold for Bank transfers
• Daily threshold for MM after modification
• Daily threshold for Bank transfers after modification
• Tax rate at implementation
• Current tax rate
• Affected transactions (sending, receiving, payments,
withdrawals, deposits)
• We also consider important components of knowledge that could
impact behaviour: rate and threshold as interest variables