Total payments in the economy declined 10% in November 2018, as the effects of an electronic payment tax introduced the previous month started to hit spending, central bank data has shown.
Government raised $170 million from the intermediated money transfer tax, which took effect on October 13, 2018. Treasury expects to raise at least $600 million from the tax this year. Previously, a flat 5 cents was taxed for every electronic transaction.
National payment system transactions amounted to $14.4 billion in November, down from $16 billion the previous month. All electronic payment methods, with the exception of ATM transactions, recorded declines in values transacted.
The volume of transactions fell 17% between October and November as well, reflecting the impact of the tax on spending patterns.
Meanwhile, government’s commitment to rein in borrowing continues to curtail money supply growth, which only edged up by a marginal 0.27% on a month-on-month basis in November 2018. On an annualised basis, money supply growth was 26% in November, off a peak of 48% registered in July 2018.
Government securities on banks’ books have also stabilised since jumping 17% from $2.9 billion in June to $3.4 billion in August 2018. Government securities came off that August peak to $3.17 billion in November.