Mixed views as new fees on electronic transactions bite

Dar es Salaam. Amidst rising concerns over the introduction of electronic transactions fees, Parliamentary Budget Committee chairman Daniel Sillo says these new fees must be paid because they are legally binding.

Views by Mr Sillo, who doubles as Babati Rural lawmaker, come at a time when there was a public outcry and different stakeholders, calling for reduction or complete abolishment of the fees/levies on the grounds that they add to the rising cost of living and threaten the circulation of money in the formal sector.

“We passed that law. It is not that we did not see it but all laws are passed in Parliament. What happened is that the government reduced the fee charge for mobile transactions by 60 percent and after that it increased the scope. Because electronic transactions are not only made through mobile but also in banks, through depositing and withdrawing funds,” he said.

Read: Experts poke holes into the new bank levies

When asked about the public outcry over the implementation of these new charges, Mr Sillo said: “Tax payment will never be a joyous thing. Paying tax is tough but it is what makes it possible for health centres to be built, as well as bringing about development”.

The new regulations came into effect in July, 2022 after Parliament amended the National Payment System Act.

The implementation of the amended regulations canceled the 2021 mobile transaction regulations and saw the reduction of levies on sending and withdrawing monies from a maximum of Sh10,000 to Sh7,000 to a transaction valued at above Sh3 million.

What the law says

Former Tanganyika Law Society (TLS) president Rugemeleza Nshala argued that the new charges violated Article 24 of the Constitution of Tanzania which allows every citizen to own property.

The article says: “(1) Every person is entitled to own property, and has a right to the protection of his property held in accordance with the law.

“(2) Subject to the provisions of subarticle (1), it shall be unlawful for any person to be deprived of his property for the purposes of nationalization or any other purposes without the authority of law which makes provision for fair and adequate compensation.”

For an employee, who transfers his salary to the bank or a businessman who sends his income to the bank, to be charged this fee, the law expert says “it is like robbing him of his property.”

“The salary has already been subjected to deductions like the Pay as You Earn tax (Paye), now when he goes to spend it, it again subjected to all these other deductions,” said Dr Nshala.

Politicians’ views

From the people’s outcries in the streets to tax and financial experts, politicians especially from the opposition also urged on the importance of providing a relief in the cost of living.

Last week, ACT-Wazalendo issued a statement to the government to cease the implementation of these new regulations and find other sources of funds to reduce the burden on low income earners.

Party’s Financial and Economic Sector deputy spokesman Juma Kombo said the deductions have increased the burden on users of banking services.

“It will lower the morale and motivation of the people to use official financial systems, and eventually reduce the circulation of money in the banking system,” he said.

Civic United Front (CUF) chairman Ibrahim Lipumba, who is also a renown economist, also stated that, the government should look at other sources of income starting from resources like land, minerals, sea, forests and domestic and foreign business activities.

“We need those fees to be stopped first, let us use technology to promote entrepreneurship. The government should find ways that do not affect the efforts of the people who want to elevate their individual economy,” argued Prof Lipumba.

For his part, former Tarime Rural lawmaker John Heche (Chadema) argued that it was a basic human right to voice their displeasure with any law deemed bad, because if not then the government would never care to change.

“Every tax has its rules. There is no taxation without representation. Although, it was passed in Parliament, this complaint shows that those who are in the law making body are either indifferent to things that hurt the ordinary citizens they are supposed tobe representing or they simply found themselves in those positions without being lawfully elected hence they don’t care about interests of the people,” he argued.

While efforts to reach Finance and Planning minister Mwigulu Nchemba did not bear fruit, ministry’s spokesman Benny Mwaipaja said there were measures being formulated to address this issue.

“The Minister of Finance and Planning will discuss the matter soon. Please wait for his explanations,” said Mr Mwaipaja over the phone yesterday.