Tanzania has scrapped the recently introduced levies on electronic transactions following public outcry.
The decision was announced by the Minister of Finance and Planning, Dr Mwigulu Nchemba, in Parliament on Tuesday when he was responding to questions from the legislators.
The government imposed the levy in July this year on bank withdrawals done over the counter, ATMs and interbank transfers and mobile wallets.
“The amendments made are to cancel the levies for transferring money from banks to mobile networks (both sides) and for transferring money within one bank,” he said.
Dr Nchemba said that the new changes would take effect on October 1.
He said the move aims to reduce the scope of charges, stimulate cash transactions, simplify levies and prevent double taxation.
The government has also cancelled levies on electronic money transfers from one bank to another.
Transaction fees for cash withdrawal through bank agents and ATMs for amounts not exceeding Tsh30,000 ($12.87) have also been waived.
At the same time, the government has abolished withholding tax on rental properties collected from tenants and instead returned the responsibility to the Tanzania Revenue Authority (TRA).
“I would like to emphasise that the withholding tax is not for the tenant but should be paid by the landlord who receives income from investment or rental business,” he said.
Dr Nchemba ordered the collected monies refunded from government expenditure savings so as not to affect services and development projects.
“Let’s cut tea, snacks, domestic and foreign trips for the officials of our ministries as the President (Samia Suluhu Hassan) has instructed. Let’s cut training, seminars, concerts, workshops,” he said.
“The government expected to collect approximately Tsh500 billion ($213.51 million) shillings from mobile and bank transactions levies,” said Dr Nchemba.
Tanzanians have been decrying the high costs, with businesses saying they have witnessed a decline in online purchases as people avoid electronic transactions.
The outcry led President Suluhu to direct a review.
- Additional reporting by Beatrice Materu