Late last week, the Finance and Budgetary Control Committee of the National Assembly of Senegal adopted a bill taxing digital financial services, including mobile money transactions and merchant payments.
The proposal, which apparently has to go through a couple more stages before becoming law, appears to involve a 0.5% tax on all money transfers, a 1.5% tax on merchant payments, and a 2% additional fee charged to merchants. There are some business exclusions, however.
The aim, says Ecofin news agency, is to find nearly CFA230 billion (about US$412.5 million) in three years to support the government’s 2025-2028 economic and social recovery plan. But some commentators argue that this bill could undermine, rather than support, economic progress.
For example, only 26% of Senegalese adults are estimated to have access to a bank account. By contrast, more than 90% of people over the age of 15 use mobile wallets. In 2025 so far, according to Business Insider Africa, mobile money platforms processed CFA15.3 trillion (US$27.4 billion) in transactions.
Given the economic profile of many mobile money users – which includes low-income households, informal workers, women entrepreneurs, and students – a tax on such transactions would disproportionately affect the poor. This could also affect commerce generally, and even family remittances, in both cases undermining financial inclusion.
If mobile taxes also drove a move back to cash, which is less easy to trace or tax, this could mean lower transaction volumes, less transparency in the economy, and reduced appetite for fintech and telecoms investment – and thus a slower pace for digital transformation.
In addition, many other attempts at taxing mobile services or revenues, some covered here, have not worked, been abandoned, or been strongly criticised, notably in Uganda, Madagascar, Cameroon, Rwanda and Nigeria.
To make matters (potentially) worse another law taxing the mobile communications sector is on the way. If it is passed, some telecommunications equipment that has benefited from permanent exemptions since 2008 will now be subject to higher duties and taxes.
