Increased use of mobile money
transfers enables authorities to track informal funds in circulation and help
in drawing up better monetary and macroeconomic policies.
At the moment the Bank of Tanzania (BoT) captured 35 per cent of
2.32tr/- total money on circulation. The amount captured is relatively low to
correct disequilibrium in the economy.
"This is attributed to the fact that the service is safe and
reliable and available throughout the country," Vodacom's Managing
Director, Mr Rene Meza said.
This huge transactions achieved per day cannot be
over emphasis, as it comes at an epoch when only about 35 per cent of 2.32tr/-
of total money in circulation are in formal channels at the end of July.
BoT Governor, Prof Benno Ndulu, once said that the mobile money
transfer has enabled the central bank to capture more money in
circulations."At the moment only 35 per cent of the total money in
circulation is in the formal sector. The rest is not," Prof Ndulu said.
Economically, capturing a small percentage of money in circulation
derails quick efforts of correcting disequilibrium in inflation, exchange rates
and extended broad money supply (M3).
This is because in combating, say demand
push inflation, the central bank mops up excess liquidity in circulation by
floating a Treasury bill. But if big portion of money is out of the formal
system this becomes difficult.
The mobile phone providers are helping the central bank to channel
monies from informal to the formal system, as these transactions are captured
through BoT channels.According to the regulations, mobile phones have to have a
trustee account for such services deposited by agents at various banks of their
choice.
And banks are adding value to mobile phone transactions by discharging
their services.Therefore the more under pillow banks are finding their ways through
mobile transactions, the better for the BoT to control all the money in
circulation and to strategise their macroeconomic fundamentals.
Money transactions aside, let's look at the amount Vodacom is
transacting per day. According to them this is 35bn/-, gross income. This is
huge amount per day meaning in every hour, M-Pesa is transacting 1.46bn/- or
24.33m/- a minute.
This is not a small sum of cash. In every passing hour,
Vodacom, the largest mobile phone provider in terms of subscribers, is roughly generated
1.46bn/-, enough to foot its wage bill per month.
Suppose, out of its gross earning of 35bn/- a day, the firm if makes a
one-per cent net profit which is the lowest estimation, it pocket 350m/- a day or 5.83m/- a minute as a net
profit coming form M-Pesa portfolio alone.
In this case, should the phone
service provider firm pay Value Added Tax (VAT) of 18 per cent only on their
one-per cent profit comes to 63m/- a day from M-Pesa only.
Should the business, if estimated to transact the same amount to the
rest of the year, the firm is supposed to pay 5.67bn/- as VAT by December. This
estimation is based only on one-per cent profit.However, Vodacom has never
feature anywhere among top ten taxpayers cooperate of this land.
When asked recently, the Vodacom MD, Mr Meza, said the important thing
was to glance at the taxation issue in a wider context since looking corporate
tax as one line item in income statement is probably a very narrow
view.
"Because you're not looking at everything else that are affecting
corporate tax and one of them being investments in this country," the
Vodacom MD said.
"I can assure you there are not many companies that have invested
over one trillion shillings in the last 10 years in infrastructure. We have
built 1,300 towers across the country.
"So when you look at the broader
picture, related to the corporate tax, which hasn't been our key contribution
in the market; in terms of VAT, excise duty we generated via offering these
services to customers and the 5bn/- in CSR to support the community, that is
other aspect we have to look at," Mr Meza said.
M-Pesa was launched in 2008 and has turned up to be the saviour of
those who could not easily access banking services and affordable and reliable
means of money transfer both locally and internationally.
Source: The Daily News,http://www.dailynews.co.tz, reported by Abduel Elinaza
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