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Electronic Levies Continue To Be A Hard Nut To Crack in Tanzania

Public pressure removes CCM from the woodwork to demand the government do something about the controversial levies.

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Dar es Salaam. The issue of electronic levies has proved to be a hard nut to crack after Tanzanians from all walks of life continue to protest against their introduction at a time when the rising cost of living is at the top of the citizens’ concerns.

The government recently introduced a new levy imposed on all withdrawals done over the counter, ATMs and all transfers (TISS & SWIFT). This was on top of another controversial levy introduced in July 2021 on all mobile money transactions.

The opposition against these levies has been so intense that the ruling Chama cha Mapinduzi (CCM) on Thursday came crawling out of the woodwork to demand the government work on raised concerns around the issue of electronic levies.

“[The party] has directed the government to assess the reality [around the levies] and take necessary measures based on citizens’ views on the levies,” CCM secretary of ideology and publicity Shaka Hamdu Shaka told journalists during a press conference which took place at the party’s mini-office in Lumumba, Dar es Salaam.

CCM’s directive comes almost a week since Finance and Planning Minister Mwigulu Nchemba held a joint ministerial press conference in the capital Dodoma on September 1, 2022, which was aimed at “clarifying” the hot issue of electronic levies.

Mwigulu sought to justify the levies by appealing to nationalism, saying that nobody will build Tanzania but Tanzanians themselves. He, however, said the government has heard the concerns raised by citizens and it would review them and act accordingly.

READ MORE: Govt At Pains To Justify Electronic Transaction Levies To Unconvinced Citizens

But, telling from their reactions online, far from appeasing the citizens, the ministers attracted more opposition from Tanzanians on the levy.

Today’s directive from CCM also follows a startling report from Vodacom Tanzania that the leading mobile financial services provider recorded an Sh103 billion loss in revenue due to levies.

“The introduction of mobile money levies in the year was an unfortunate development for financial inclusion in Tanzania,” Vodacom Tanzania’s company’s board chairman, Thomas Mihayo was quoted as saying in the company’s annual report deposited with the Dar es Salaam Stock Exchange (DSE).

That was not the first time that Vodacom Tanzania made such a report though.

Days after being imposed, then chairperson of Tanzania Mobile Network Operators Association (TAMNOA), who doubled as Vodacom Tanzania’s CEO, Mr Hisham Hendi revealed that millions of people, especially those in rural parts of Tanzania, had stopped using mobile money services due to rising costs.

By December 2021, Vodacom Tanzania reported a 4.4 per cent decline in the number of users of their M-Pesa mobile money service plus a 24.8 per cent decline in the M-Pesa transactions, with the company pointing out that the shortfall was the result of levies.

READ MORE: Taking Stock of Govt’s Latest Levy on Bank Withdrawals

CCM directive also comes a few days since Twaweza, a regional organisation that works on issues of governance, published its Sauti za Wananchi findings that showed that, among other things, the number of people using mobile phones to send and receive money has decreased since the government introduced the levy.

The findings also showed that three main issues trouble the majority of Tanzanians: the rising cost of living (48 per cent), the lack of employment or income-earning activity (29 per cent) and hunger or the lack of food (26 per cent).

READ MORE: Is Rising Cost of Living Jeopardizing Movement for Political Reforms in Tanzania?

During his Thursday press conference, Mr Shaka joined other stakeholders in urging the government to consider ways it would use to widen its tax base as well as reduce government expenditures.

“The government should also consider creating a friendly and enabling environment that would allow the building of a manufacturing economy for the goal of widening its tax base,” Mr Shaka said.

Mr Shaka also directed the government to come up with a fair and standardized taxation system that would not hurt the poor.

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