Tanzania: Why Mobile Transaction Levies Need Review

Dar es Salaam — The government hinted on a possible U-turn on its newly-introduced mobile money levy yesterday in a move that analysts say was inevitable.

Finance and Planning minister Mwigulu Nchemba said on Monday that President Samia Suluhu Hassan has heard the people's complaints against the new mobile money levies - and that she had instructed the ministry to work on the matter.

In an effort to raise its revenue collections by Sh1.254 trillion to finance the Sh36.68 trillion budget for the 2021/22 financial year, the government last month amended the Electronic and Postal Communication Act (CAP 306) by imposing a 'patriotic levy' on all mobile money transactions, depending on the amount sent and withdrawn.

For example, sending Sh1 million to someone nowadays, and having the money withdrawn at the other end, will cost a total of Sh31,000 at the in all. The levy, which became effective on July 15 this year, has since been roundly criticised as people believe the amount being deducted was too high for Tanzanians to bear - and that it was going against the country's financial inclusion agenda.

But in what signals that the government could backtrack on the new levy, Dr Nchemba said on Monday that President Hassan has been personally concerned by the people's complaints.

"I urge Tanzanians to remain calm as the government works on the matter... Their complaints have reached the President and she is concerned about people's complaints. She has instructed that we should work on the complaints," he said.

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