Mobile money levies prompt uproar

Dar es Salaam. Yesterday, businesses started the day badly, feeling the pinch of the government’s new higher charges on mobile money transactions involving sending and withdrawing money using mobile telephony.

This comes as the government started collecting that much more from your cash in efforts to increase the tempo of implementing mega development projects while simultaneously seeking to avoid overtaxing productive economic sectors that have been savaged by the global Covid-19 pandemic.

In efforts to raise its revenue collections by Sh1.254 trillion to partly fund 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306) by imposing a levy of between Sh10 and Sh10,000 on mobile money transactions, depending on the amount sent and withdrawn.

For example, sending and withdrawing Sh1 million over the phone now costs a total of Sh31,000 for both transactions.

Businesses were quick to criticise the new charges after they came into effect yesterday. The founder of the innovation Hub255, Mr Jones Mrusha, told The Citizen that online businesses will be adversely affected by this because the public will avoid using the mobile wallet system, discouraged from online purchasing by the new charges.

“If one has Sh100,000 in one’s mobile wallet, one can only withdraw Sh91,000, the rest going to the government. This is too much for ordinary Tanzanians,” he said.

In more or less similar vein, mobile money agent already claim that customers were blaming them for the steep charges, with some saying they were being short-changed.

An agent based at Tabata in the city, Mr Toni James, said some customers accuse him of scamming by deducting inordinately huge sums in money withdrawal transactions.

“The business is already most discouraging. Today (yesterday), people have not being using the mobile money transactions system as they normally did in the recent past,” he lamented.

Ms Rahel Farahani said, “My business is a home-based bakery. I rely on network customers because I don’t have business premises. These deductions are going to seriously hurt my business - and I am considering to shift to another location from home.”

Ms Farahani also claimed that the government decision on the new charges will hurt people including self-employed women and youths.

“Right now I am thinking of going back to ordinary banking, away from mobile money transactions. I started my business about a year ago, and was starting to amass customers. Now all the gains will end up in the transactions tax.”

Ms Anastazia Goronga sells aroma therapy products. She says she has already received complaints from young people who are her customers. “I sell my products online, and customers paid me using mobile money. I have now warned them that when they pay me, they should take into account the exorbitant new charges for withdrawing the money from the wakala,” she said. However, she now fears that she could start losing her customers because of the new high mobile money transaction costs.

“Today (yesterday), we chat ted with friends about the new costs, and decided to go back to normal banking which is a little cheaper. But, in my view, the mobile money system was the simplest and fastest way to keep money in circulation,” she said.

For his part, Mr Kassim Msuya called on Tanzanians to pay taxes for development because no foreigner will do that.

Calling the new charges “patriotism levy”, Finance Minister Mwigulu Nchemba said it was important that every Tanzanian contributed to public revenues.

“With this levy, we seek to boost government funding so as to take care of our pressing needs... We have schools that do not have running water… Apart from cholera, there is also the global Covid-19 pandemic that requires hand-washing. The money will be collected through mobile money transactions,” he said on Clouds Television’s 360 Programme on Monday.