Government considering a U-turn on mobile money transaction charges

Dar es Salaam. The government may make a u-turn on its newly-introduced mobile money levy after the public unanimously rebuffed the move on the ground that it was defeating Tanzania’s financial inclusivity goal.

Finance and Planning minister Dr Mwigulu Nchemba said on Monday that President Samia Suluhu Hassan has heard people’s complaints against the new mobile money levy and that she (the President) had instructed the Ministry to work on the matter.

In an effort to raise its revenue collections by Sh1.254 trillion to partly 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Communication Act (CAP 306) by imposing a levy on all mobile money transactions, depending on the amount sent and withdrawn.

A calculation of the charges indicate that sending Sh1 million to someone and having the money withdrawn will cost a total of Sh31,000 if all the current and new charges are added up.

The levy, which became effective on July 15, has since been roundly criticised as people believe the amount being deducted was just too high for Tanzanians to carry.

Some have gone to the point of promoting other transaction mechanisms, including through banks and hard cash to dodge the colossal deductions.

But in what signals that the government would backtrack on the levy, Dr Nchemba said on Monday, July 19, 2021 that President Hassan has been personally concerned by 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 cries. She has instructed that we should work on the complaints,” he said.

He said since the levy was now legally-binding after the Parliament approved the 2021 Finance Act and Appropriation Act, the Ministry of Finance and Planning and that of Information and Communication Technology (ICT) will have to work on the regulations and see the way forward.

He said work on the grievances was in full gear and that even the Prime Minister has called for a meeting where the government will deliberate on the subject.

He said the government will also keep on clarifying the issues that need mere clarification and rectify those [areas] that need rectification.

Experts from the Ministry of Finance were currently looking at the National Payment System while their counterparts from the ICT Ministry were also looking at the Electronic and Postal Communication Act with a view to identifying issues that need to be clarified and/or rectified.

ICT Minister Dr Faustine Ndugulile assured Tanzanians that the issue will be worked on once and for all.

Apart from ordinary Tanzanians, mobile operators are also on record as having been quoted saying that business had dropped significantly since the levy became operational on July 15.

The chairman for Tanzania Mobile Network Operators Association (Tamnoa), Mr Hisham Hendi who doubles as Vodacom Tanzania chief executive officer is quoted by the Monday, July 19, 2021 edition of Mwananchi Newspaper as saying that millions of customers – especially those in rural areas - had stopped using mobile money services due to the rise in costs.

This, he said, was also threatening the survival of telecommunication companies in the country.

“Our revenues are dropping drastically because consumers are not using the services…The situation is not good at all,” he said.