Dear leaders, no one wins when you milk a cow while starving it

Thursday July 29 2021
Mobile transaction fees

Mobile transaction fees have been increased immensely. PHOTO | FILE | NMG


So, there has been some economic drama this week. At the suggestion of a Member of Parliament, mobile transaction fees have been increased immensely. I am talking about the Roman Emperor Nero levels of tax as he tried to rebuild a city that had been burned down. This is confusing because we are not Rome, and nothing has burned down to levels that would warrant such aggression.

And it is aggression. Oh, I know that we are a poor country. Sometimes it feels like we do not act on this. Every time the vulnerable private sector starts to do well -- and consistently well too rather in a boom and bust cycle -- something happens. The mineral sector has had spectacular ups and downs. It was particularly harsh, visible, and damaging to the cashew farmers, whom I thought had been effectively bullied just in 2018, but this is not the case at all. It has happened several times in several sectors. Now, this new all-encompassing tax has everyone in high dudgeon.

While I stoked my own high dudgeon, I was amused by the fact that this is a very East African issue. If it hadn’t been for Kenyan innovation in using technology to move money around easily and cheaply, many people would still be trying to open bank accounts or keeping their cash under their mattresses. Somehow this makes the injury worse, knowing that our neighbours did a good thing, only for us to find ways to exploit it for worse.

When it comes to customers, I must start my lamentation with women. Women, you see, run a large share of small and medium as well as informal enterprises. We all have women in our lives providing goods and services, who have benefited from microloans, alternative savings plans and electronic money. This not only benefits the customers, it makes several sectors thrive.

Then there’s my beloved youth. Y’all, life is so hard for them. Our education system lets them down, there are few jobs that can match skillsets to labour. Farming is becoming less dependable as employment, just as it is everywhere in the world. But bless them, they “look for life,” to translate it directly from Kiswahili. They look for it in every possible way. Most of day workers whose income involves -- you guessed it -- electronic microtransactions. And every single transaction is taxed, which has made the mobile companies the goose that lays the golden eggs for the government.

Everybody knows what happens when the goose has a cold. In fact, the last time this sort of thing happened, the government decided to increase prices of all mobile services but not transactions. The fun part? They didn’t see the protest coming. Users, as is our Tanzanian way, made a lot of noise but we also leaned very heavily where it hurt: the mobile phone firms who, themselves, were not at all happy. So they did a beautiful thing and, as an industry, made sure that customers knew exactly whose fault this was. This helped the government to backpedal quickly, but now we have precedents and bad blood between users and the government.


I think that there are at least two types of corruption. The first one is found in developed countries more frequently because the oversight and institutions are strong. In that corruption, people skim off deals in ways that don’t necessarily kill off the deal. In other words, corrupt folks can milk the cow without killing it. But I fear that our corruption, in Tanzania, is the kind where people in power really don’t understand the ultimate goal is not to starve the cow but to fatten it and enjoy its products for a long, long time.

Taxes are heinous, to begin with, but for as long as there have been states of any kind we have been convinced that they are necessary. I happen to agree, because public works projects will not build themselves. We have yet to find a more efficient way of providing infrastructure and public services and international relations. And, on a personal level, I just agree because I hate extreme inequality so public redistribution of funds is a moral and beautiful thing.

If only my government knew this. I looked up the monthly salary and benefits of my Member of Parliament and realised that I should not have. It emphasised that the return on investment that we make on these 300-plus "representatives of the people" does not bear thinking about. Yet they are the ones, plumply paid from the taxes of strugglers and an anorexic private sector, who sat and thought to themselves: how can we make life just a little bit harder for everybody else? How about we take an essential service and make it almost unaffordable?

In a country struggling with basic public services, this is immoral. My hope is that there will be massive and effective push-back from the public, just as there was last time. But I do not know whether any of the protesting that has taken place is having an effect. What I do know is that if we keep this kind of regressive taxation, nobody wins.

There is a silver lining here, though. The discrepancies between what Members of Parliament promise their constituents and what they end up delivering are becoming more and more tangible. Is that why mobile services are becoming more expensive? Bears thinking about.

Elsie Eyakuze is a consultant and blogger for The Mikocheni Report: E-mail: [email protected]