{
  "title": "Taxing Mobile Money: Theory and Evidence",
  "publication": "IMF Working Papers, December 5, 2025",
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  "summary": "Mobile money has become a central digital alternative to traditional banking in developing countries, yet several African governments have introduced taxes on mobile money transactions. We develop a model that characterizes how such taxes affect payment choices and generate excess burden.",
  "sections": [
    {
      "heading": "Overview",
      "content": "- Mobile money is a central digital alternative to traditional banking in developing countries.\n- Several African governments have introduced taxes on mobile money transactions.\n- The authors develop a model and provide empirical evidence using cross-country survey data and transaction-level data from Cameroon, the Central African Republic, and Mali.\n- Key quantified result: the excess burden of the tax is quantified at 35% of revenue."
    },
    {
      "heading": "Theoretical framework and predictions",
      "content": "- Model characterizes how transaction taxes affect payment choices and generate excess burden.\n- Predicted behavioral responses:\n  - Taxation reduces mobile money use.\n  - Elasticities are shaped by access to substitutes and transaction costs.\n  - Banked users substitute into formal alternatives.\n  - Unbanked users face higher effective costs, making the tax regressive.\n  - Taxation induces substitution into cash, raising informality."
    },
    {
      "heading": "Empirical evidence",
      "content": "- Data sources:\n  - Cross-country survey data.\n  - Novel transaction-level data from Cameroon, the Central African Republic, and Mali.\n- Main empirical findings:\n  - Sharp declines in mobile money usage following taxation.\n  - Stronger usage responses among the banked relative to the unbanked.\n  - Unbanked and rural users bear a disproportionate burden of the tax."
    },
    {
      "heading": "Quantification of efficiency and distributional costs",
      "content": "- Using empirical estimates, the paper gauges the excess burden of mobile money taxation.\n- Quantified excess burden: 35% of revenue.\n- Distributional implication: the tax is regressive, with higher effective costs for unbanked and rural users and substitution toward cash increasing informality."
    },
    {
      "heading": "Policy implications",
      "content": "- Taxing mobile money generates significant efficiency costs relative to revenue raised.\n- Regressivity concerns: unbanked and rural populations are disproportionately affected.\n- Substitution into cash suggests potential increases in informality, undermining tax base and policy goals.\n\nSource: Michael Barczay, Shafik Hebous, Fayçal Sawadogo, and Jean-François Wen, \"Taxing Mobile Money: Theory and Evidence\" (IMF Working Paper, December 5, 2025).\n\n---\n\n Content in this bundle\n\n- Working Paper\n  - Working Paper (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Working Paper (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2025/12/05/taxing-mobile-money-theory-and-evidence-572369"
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    "Authors: Michael Barczay, Shafik Hebous, Fayçal Sawadogo, Jean-François Wen",
    "Published: December 5, 2025",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9798229030717.001",
    "Mobile money is a central digital alternative to traditional banking in developing countries.",
    "Several African governments have introduced taxes on mobile money transactions.",
    "The authors develop a model and provide empirical evidence using cross-country survey data and transaction-level data from Cameroon, the Central African Republic, and Mali.",
    "Key quantified result: the excess burden of the tax is quantified at 35% of revenue.",
    "Model characterizes how transaction taxes affect payment choices and generate excess burden.",
    "Predicted behavioral responses:",
    "Data sources:",
    "Main empirical findings:",
    "Using empirical estimates, the paper gauges the excess burden of mobile money taxation.",
    "Quantified excess burden: 35% of revenue.",
    "Distributional implication: the tax is regressive, with higher effective costs for unbanked and rural users and substitution toward cash increasing informality.",
    "Taxing mobile money generates significant efficiency costs relative to revenue raised.",
    "Regressivity concerns: unbanked and rural populations are disproportionately affected.",
    "Substitution into cash suggests potential increases in informality, undermining tax base and policy goals.",
    "**Working Paper**"
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