Just as we start the New Year, consumers will not be happy that they will be paying more to use one of the most widely used financial services products in Zimbabwe. Through a text message sent to customers, Ecocash announced today that effective immediately, they will be charging a $0.05 ( 5cents) transaction tax on applicable transactions in response to the a new government Tax Policy.
Although the Ecocash text message states that the 5c tax will be levied on “applicable transactions”, unverified claims from our sources suggest the 5c will be charged on all transaction forms like sending money or cash out but it may suggest that low amount transactions will be exempted from this tax levy.
We spoke to an Ecocash agent who said that there are (or will be) new Ecocash tariffs charts factoring this tax levy into the pricing.
The financial implications of this move will be staggering for both government and consumers. For consumers, the already expensive Ecocash will simply cost you $0.05 more.
For government on the other hand, a whole new floodgate of revenue has opened. We don’t know how many transactions are done on the EcoCash platform each month but we do know that they were worth $200 million per month as of last year. Either way, the government is poised to make a killing as the platform may make hundreds of thousands of transaction per month.
Econet will obviously say the government forced their hand but I am not sure how government will explain the contradiction this move makes having said the following during the 2014 budget presentation,
Mr Speaker Sir, I want to commend the mobile banking service providers for enhancing financial inclusion by reaching out to the formally unbanked through introduction of such products as EcoCash, One Wallet, Textacash, E-wallet, among others.
Government stands ready to work and support initiatives that broaden the participation of the generality of the populace in the financial sector.
In this regard, the Reserve Bank is reviewing the regulatory framework to cover all aspects of mobile banking.
It will also be necessary that charges for such services are made affordable, that way also increasing clientele, financial inclusion and lowering average costs.
These new measures are set to affect all mobile money players including the soon to be launched Telecash.