Tanzania reduces mobile money levy by 30 percent
Thursday September 02 2021
The Tanzanian government has reduced by 30 percent the mobile money levy it approved, amid complaints from residents that the levy was a financial burden.
In June, the government amended the Electronic and Postal Communication Act (CAP 306) by imposing a levy of between Tsh10 ($0.0043) and Tsh10,000 ($4) on mobile money transactions, depending on the amount sent and withdrawn.
The levy came into effective on July 15.
The government had endorsed the levy in an effort to raise revenue by Tsh1.254 trillion ($500 million) to partly finance the Tsh36.68 trillion 2021/2022 budget ($15 billion).
The money was to be used to construct health centres and classroom, and to fund other social projects.
Finance Minister Mwigulu Nchemba said that since the levy came into effect in mid-July, about Tsh63 billion ($28 million) has been collected.
However, Tanzanians complained that the mobile money transaction cost had become too high, while businesspeople said their businesses would be adversely affected as people were avoiding the costly mobile phone transactions and online purchases.
The outcry led President Samia Suluhu to direct the Finance minister and his Communications and Information Technology counterpart Faustine Ndugulile to review mobile money transaction charges.
The two ministers formed a taskforce that held talks with mobile service providers and agreed unanimously to reduce the rates charged on mobile money transactions.
Following public outcry, Uganda in 2018 revised its controversial one percent tax on all mobile money transaction. The levy was to affect deposits, sending and receiving money. The government reduced the levy to 0.5 percent and directed that only be applied to withdrawals.