Malawian consumer groups have said they are against a new tax on mobile phone money transactions that has been proposed by Finance Minister Joseph Mwanamveka.
The minister introduced a 1% tax in this year’s budget on what is called mobile money, which is currently being debated and expected to pass this month.
John Kapito, who heads the Consumers’ Association of Malawi (CAMA), says the proposed tax disproportionately impacts low-income consumers.
“The majority of mobile money service consumers are the poorest of the poor with no access to banking services,” Mr Kapito said.
He added that these people would be hit hardest and could resort to unsafe methods of keeping money in their home.
Mobile money organisations have over seven million subscribers in Malawi with more than 40,000 agents – the people who handle cash deposits and withdrawals.
Tax on transactions has proved unpopular in other African countries.
After protests in Uganda, the government reduced its tax from 1% to 0.5% of the value of the transaction.