(Mobile Money Transaction Levy Act No. 16 of 2023)

On December 26, 2023, the Parliament passed the Mobile Money Transaction Levy Act No. 16 of 2023 (referred to as the “Mobile Money Levy Act”). This law aims to impose, collect, and manage levies on mobile money transactions. Many people and various sectors, including informal businesses, heavily use mobile money transactions in Zambia for their financial activities. Zambia has been working hard to expand its financial market, and mobile money transactions have played a significant role in this progress. Now, the question arises: How will the Mobile Money Levy Act impact Zambia’s achievements? Let’s explore some of the key aspects of this Act.

Key Definitions under the Mobile Money Levy Act

Section 2 of the Bill provides for definitions of the Bill and the following are the most noticeable in relation to the implications of the Bill:

• “Bank” means the Bank of Zambia.
• “Electronic money” means the store of monetary value electronically represented by a claim on the mobile money service provider that is:
  • issued on receipt of funds in an amount not less in value than the value of the electronic money issued;
  • stored on an electronic device;
  • accepted as a means of payment by persons; and
  • redeemable on demand.
• “person-to-person transfer” means a transfer of electronic money from one person
  to another person.

Note: therefore, money stored in your mobile money accounts held with service provider is electronic money.

Salient Features of The Mobile Money Act

Interestingly the Mobile Money Levy Act defines merchant as a person or entity that accepts electronic money as a means of payment for goods and services which is registered with the Zambia Revenue Authority but it excludes betting. Section 4(1) of the Mobile Money Levy Act provides for the imposition levies on mobile money transactions and mandates a mobile money service provider to collect levies from person-to-person transactions at the rates provided in the schedule. The current rates provided in the schedule are as follows:

• Amount Range (ZMW) Levy (ZMW)
• Between 1 to 150 0.08
• Between 151 to 300 0.10
• Between 301 to 500 0.20
• Between 501 to 1,000 0.5
• Between 1001 to 3, 000 0.80
• Between 3,001 to 5, 000 1.00
• Between 5, 001 to 10, 000 1.50
• Above 10, 000 1.80

The amounts appear to be negligible however, mobile money users should take them into consideration.

Section 4(2) the Mobile Money Levy Act places the duty to pay the levy on a person-to-person transaction on the person sending the money and collected by the mobile money service provider. This is in addition to the charges already levied by the mobile money service providers.

Section 4(3) to (6) of the Mobile Money Levy Act provides for the responsibility of a mobile money service provider to remit the levies collected to the Bank of Zambia and the procedure to do the same.

Section 4(7) of the Mobile Money Levy Act makes it an offence for a mobile money service provider to fail to remit electronic transaction levies to the Bank.

Section 5 of the Mobile Money Levy Act provides that the following are exempt from the levy:

• transactions between person to Government. This means that transactions such as those made through the Government E-Payment system are exempt from payment of levies.
• transactions from Government to Person.
• payments for utilities such as those done for electricity units, water bills and and television levy.
• transfers from a bank account