DIG/ The argument of the Minister of the Economy and Investments Mays Mouissi was not enough to convince parliament.
Firmly fought by the president of the Gabonese Association of Bank Users (AGUB), Gildas Ndzengue Mbomba, the bill on taxation of electronic transactions was simply rejected.
Indeed, the National Assembly of the Transition unanimously adopted, on Wednesday december 11, 2024, the removal of the tax on bank withdrawals and that on mobile banking services which were included in the Bill.
This new tax fixed the withholding rate at 0.5% and it was to apply to all natural or legal persons with an electronic money account opened with an electronic messaging company.
This tax was to apply only to higher electronic financial transactions or equal to 10,000 FCFA made from mobile money and should only concern withdrawal operations, electronic payments and national and international electronic transfers.
The Ministry of the Economy thus counted take 26 billion francs per year to finance certain priority projects contained in the National Transition Growth Plan (PNDT).
“This is sending the wrong signal to consumers. This is a measure that will limit financial inclusion, the government says it is fighting against the high cost of living but we are adding new taxes at the expense of consumers. It is regrettable to note that instead of increasing the purchasing power of households, the government is choosing to lower it”the president of Agub protested during the presentation of this bill.
The parliamentarians finally agreed with him.
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What are the potential long-term effects of rejecting the electronic transaction tax on Gabon’s economy?
Interview: The Implications of Gabon’s Rejected Electronic Transaction Tax with Gildas Ndzengue Mbomba
Editor, Time.news: Thank you for joining us today, Gildas. As the president of the Gabonese Association of Bank Users (AGUB), your outlook is invaluable in understanding the recent developments regarding the taxation of electronic transactions. Could you start by summarizing the key reasons behind the parliament’s decision too reject this tax?
Gildas Ndzengue Mbomba: Thank you for having me. The recent rejection of the bill to tax electronic transactions largely stemmed from concerns about its impact on consumers. The proposed 0.5% withholding tax on withdrawals and mobile banking services would have affected anyone making transactions over 10,000 FCFA. We felt it would hinder financial inclusion, notably at a time when many families are struggling with rising living costs. Parliament recognized that introducing such taxes directly contradicts the government’s claims about combating the high cost of living.
Editor: That’s a critical point. What implications does this rejection have for financial inclusion in Gabon?
Gildas Ndzengue Mbomba: The rejection sends a powerful message that our government must prioritize consumer welfare and financial accessibility. By avoiding this tax, we encourage more people to engage in electronic transactions, which is essential for enhancing financial inclusion. When people are burdened with additional costs, they may be deterred from using banking services entirely, narrowing their options and possibly pushing them back into cash-based economies, which lack the benefits of regulated financial activity.
Editor: You mentioned consumers’ purchasing power.How do you perceive the government’s strategy in managing economic challenges while proposing such taxation?
Gildas Ndzengue Mbomba: It is indeed indeed perplexing. While the government aims to generate approximately 26 billion francs annually to fund priority projects, it should consider whether this approach genuinely aids the economic recovery. imposing new taxes like these can shrink household purchasing power, especially when many people are already facing financial strains. The focus should be on fostering a conducive economic environment that supports growth without compromising consumer affordability.
Editor: In your opinion, what choice strategies could the government consider to foster economic growth while ensuring consumer protection?
Gildas Ndzengue Mbomba: There are several strategies they could explore. For instance, implementing economic policies that stimulate job creation, enhancing the digital infrastructure to support financial technology innovation, and providing incentives for businesses that promote financial services access. Additionally, engaging with stakeholders, including consumer advocacy groups like AGUB, to understand their needs can lead to more balanced solutions that encourage growth while protecting consumers.
Editor: Lastly, what advice would you give to consumers in Gabon, considering the current economic climate and the evolving digital transaction landscape?
gildas Ndzengue Mbomba: My advice to consumers is to stay informed and to engage with digital financial services cautiously. It’s essential to understand the terms and conditions of any service they use, especially as regulations continue to evolve. Moreover,consumers should advocate for their rights and interests through organizations like AGUB to ensure their concerns are considered in future policymaking. It’s about empowering themselves and ensuring their voices are heard in financial discussions.
Editor: Thank you, Gildas.your insights are incredibly valuable as Gabon navigates these economic challenges. We appreciate your time and expertise.