Senegal collected 54.2 billion CFA francs (US$92 million) in revenue from its digital payments tax by the end of March, falling significantly short of the government’s first-quarter target of 94.8 billion CFA francs, according to the latest budget execution report.
The tax achieved only 57.2 percent of its projected revenue, the Ministry of Finance and Budget said, highlighting challenges in implementing the levy, which was introduced to help finance the country’s Economic and Social Recovery Plan (PRES).
The ministry attributed the revenue shortfall to technical and operational constraints, including difficulties in rolling out the tax system and expanding the pool of taxpayers subject to the levy.
Authorities also cited the complexity of identifying and monitoring the growing volume of digital transactions covered by the tax, noting that efforts to fully capture taxable electronic payments remain ongoing.
Despite the weak first-quarter performance, the ministry expressed confidence that collections would improve during the remainder of the year.
It said the tax system was undergoing a gradual rollout and expected revenue to accelerate from the second quarter as collection mechanisms become more effective and administrative processes are strengthened.
The digital payments tax forms part of the government’s broader strategy to mobilise domestic revenue and reduce pressure on public finances while funding economic recovery programmes.
However, Senegal’s experience reflects wider concerns across Africa over the effectiveness of taxes on electronic financial transactions.
Neighbouring Ghana introduced a tax on electronic transactions in 2022 but abolished it in 2025 after it failed to generate the expected revenue and was widely criticised for discouraging the use of mobile money services.
The experience has drawn increasing attention from policymakers and international financial institutions assessing the impact of digital transaction taxes on financial inclusion.
In a working paper published in December 2025, the International Monetary Fund (IMF) concluded that taxes on mobile payments tend to reduce the use of digital financial services by increasing transaction costs.
The IMF said such taxes often encourage consumers to revert to cash payments, particularly among lower-income and less-banked populations that rely heavily on mobile money and have limited access to alternative financial services.
According to the Fund, the broader economic costs of taxing electronic transactions can, in some cases, outweigh the fiscal benefits if the policy discourages digital payments, slows financial inclusion and reduces economic activity.
Senegal’s government nevertheless maintains that improvements to tax administration and enforcement will help narrow the gap between projected and actual revenue over the coming months.
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Analysts say the success of the measure will depend on the authorities’ ability to strengthen compliance while ensuring the tax does not undermine the rapid growth of digital payments, which have become an increasingly important part of the country’s financial system.
