In Cameroon, the 2025 Finance Law, effective January 1, has imposed an additional tax on mobile money transactions, leaving operators, users, and international observers scratching their heads in unison.

Mobile phone users woke up on New Year’s Day to a cheery message from their service providers: “Dear customer, following the 2025 Finance Law, starting January 1, 2025, OM transfer and withdrawal fees will increase by 4 FCFA per transaction.” 

The Fine Print

The Finance Ministry, led by Louis Paul Motazé, issued a circular on December 31, 2024, confirming the new levy. The “specific fee of 4 FCFA per transaction” is an additional layer atop the existing 0.2% electronic money transfer tax (TTA) introduced in 2022. For gamblers and gaming enthusiasts, the stakes are even higher: withdrawals and deposits linked to gambling now face a punitive 1% tax, ostensibly due to the “specific nature of the associated financial flows.”

This hazy approach to taxation hints at the government’s view of mobile money as a fiscal goldmine. With mobile money penetration at 43% and nearly 12 million users — split evenly between MTN and Orange — the sector has become a juicy target for revenue generation. For context, Cameroon’s credit card penetration languishes at 1.6%, while debit card usage fares marginally better at 7.4%.

The government’s persistent targeting of mobile money has raised eyebrows, not least among international financial institutions. The International Monetary Fund (IMF), in a 2022 report, warned that such taxation disproportionately affects the unbanked population. “Taxing mobile money may be fiscally unfair and hinder the already low levels of financial inclusion,” the IMF noted, adding that rural users, already burdened by high banking costs, would bear the brunt of these measures.

Cameroon’s mobile money ecosystem is dominated by two heavyweights: MTN and Orange. Together, they control the market, each boasting approximately six million users. Smaller players like Afrikpay, Amoney, and Maviance exist — perhaps optimistically — in the shadow of these giants.

For newcomers, the market’s hostility is legendary. Société Générale’s YUP, once a hopeful entrant, exited the stage in 2022 after racking up $8 million in losses. YUP’s failure was a masterclass in how not to compete in Cameroon’s mobile money market, where entrenched players enjoy infrastructural and customer loyalty advantages that newcomers can only dream of.

Who Pays the Price?

For operators like MTN and Orange, the tax’s burden often trickles down to the end-users. The government’s rationale — broadening the fiscal base — is not without merit. However, critics argue that such policies risk stifling a sector that has been a bright spot in Cameroon’s economic landscape.

As transaction tax rises, the unbanked population in Cameroon may revert to informal channels, undoing years of progress in financial inclusion, mostly achieved through mobile money. For the government, this could mean a Pyrrhic victory: higher revenue in the short term but potential stagnation in mobile money adoption and usage over the long term.

Cameroon’s government faces a delicate balancing act. On the one hand, mobile money is a lucrative avenue for boosting state coffers. On the other, over-taxation risks alienating both users and investors in a sector that remains pivotal for economic growth.

The 2025 Finance Law is a stark reminder of the challenges in regulating and taxing emerging industries. Whether this move will solidify Cameroon’s fiscal position or push mobile money users to the brink remains an open question. For now, as operators and users alike adjust to the new reality, one thing is clear: in Cameroon, innovation — in taxation, at least — is alive and well.