MTLF: Taxation on mobile services hinders internet penetration in Tanzania, says GSMA

Dar es Salaam. Stakeholders have advised that Tanzania should review its taxation on mobile services to facilitate easy access to digital services in the country.

According to GSMA's research on mobile services in Sub-Saharan Africa, Tanzania faces five obstacles that prevent people from connecting to internet services, including service costs, lack of education about the importance of digital services, lack of trust in those services, and how to access those services, including access to national IDs.

Speaking today, Tuesday, June 20, during the Mwananchi Thought Leadership Forum on ‘Digital Transformation for a Sustainable and Inclusive Future," Caroline Mbugua said, "What do we need to be doing? What do we need to address for consumers to actually be able to go online for Tanzania to be able to achieve 80 percent broadband penetration by 2025? It's affordability, nothing else."

According to GSMA data, the level of taxation in the mobile industry is almost double that of the whole East African region; Tanzania accounts for 47 percent of total taxation in mobile services, higher than 22 percent in the East African region.

"There is a need to re-examine taxation on mobile services in Tanzania," advised Director for Public Policy at GSMA for Sub-Saharan Africa,Ms Mbugua.

Launched in 2008 in Tanzania, mobile money has driven financial inclusion by improving access to affordable and accessible financial services for underserved populations. However, the service has been slowly adopted as compared to other countries in the region.

According to the Tanzania Communications Regulatory Authority (TCRA) quarterly report, mobile subscribers have reached 61.9 million as of March 2023, but only 44.35 million are subscribed to mobile money services.

Ms Mbugua advised the government and mobile service providers to think outside the box when looking to provide jobs for the people so as to be able to afford mobile service, hence more digital use.

She said, "This is a great opportunity, but when you look at the level of affordability of mobile services to be able to do digital trade, it means that a trader in Tanzania will be disproportionately disadvantaged compared to a trader in another country."

She insisted that the more affordable services are, the better an individual's chance of competing in the market.

"Like other sub-Saharan African countries, mobile financial services are what drives financial inclusion in Tanzania. Consequently, the more mobile services are affordable, the better and more inclusive financial services will be in the country."