Govt to Reduce Controversial Mobile Money Transaction Levy by 30 per cent

Minister of Finance Mwigulu Nchemba has already signed amendments of the regulations on the controversial levies that are going to reduce the levies charged by 30 per cent.

Dar es Salaam. President Samia Suluhu Hassan on Tuesday directed Finance and Planning Minister Mwigulu Nchemba and Information and Communication Technologies (ICTs) Minister Faustine Ndugulile to review the mobile money transaction levy that has continued to face criticism from various quarters of Tanzania.

According to a statement released by ministry of finance spokesperson Mr Ben Mwaipaja, Dr Nchemba has already signed amendments of the regulations on the controversial levies that are going to reduce the levies charged by 30 per cent. 

The statement added that the government has engaged the country’s mobile money operators on the issue who have all also agreed to the request of reducing the amount of charges they impose on people using mobile money transaction services by 10 per cent. 

The levy, together with that on airtime, were introduced as part of the government strategy to finance its Sh36.6 trillion budget for the 2021/2022 financial year, with a total of Sh1.65 trillion expected to be collected from them. The mobile money transaction levy became operational on July 15, 2021, following an amendment of the Finance Act, 2021.

Following the backlash triggered by the introduction of the levy, President Samia said on July 27, 2021, that she had formed a committee to analyze people’s complaints about the levy, adding that any government’s decision on the controversial levy will be based on the committee’s recommendations.

“The government believes that this decision will give citizens a relief [of life] as well as enabling it to collect revenues that would enable it to implement various developmental projects,” said Mr. Mwaipaja in the statement. 

“It is the government’s belief that citizens will support this decision as the levies collected have already produced tangible benefits to people, including the collection of Sh48.4 billion that is expected to fund the construction of 150 health centres and the completion of 560 classrooms across the country,” Mwaipaja added.

At least two cases are ongoing at the High Court in Dar es Salaam challenging the levy that critics have slapped as unfair to people using mobile money services in Tanzania as well as for being ‘extortionist.’ Legal and Human Rights Centre (LHRC) and human rights activist Odero Charles Odero have filed the cases separately calling for the levies to be quashed.

Then-chairperson of Tanzania Mobile Network Operators Association (TAMNOA) Mr Hisham Hendi revealed on July 19, 2021, that millions of people, especially those in rural parts of Tanzania, had stopped using mobile money services due to rising costs. Mr Hendi, then doubling as the CEO of Vodacom Tanzania Plc, called this phenomenon “a threat” to operators’ businesses.

“Revenue has dropped drastically because consumers are not using our services as they were in the beginning. The situation is not good,” Mr Hendi was quoted by the media as saying. He was speaking on behalf of other members of TAMNOA. “We believe the government will see this and take appropriate action because this tax affects business and hurts the people.”


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