Tanzania's Finance Minister, AG face court case over levies
Minister of Finance and Planning, Mwigulu Nchemba. PHOTO | FILE
What you need to know:
- The debate has been raging for over a month now after the government amended the the Parliament amended the National Payment System Act and their subsequent regulations which introduced the new levies.
Dar es Salaam. The Legal and Human Rights Centre (LHRC) has filed a case in the High Court opposing the introduction of new levies on electronic money transaction.
In July, 2022, Parliament amended the National Payment System Act by imposing a new levy on all electronic money transactions to raise government revenue.
The fees became effective last month after the enactment of the Electronic Transactions Fee Regulation.
The LHRC has sought a judicial review on the Act as well as its regulations that imposed levies on all electronic financial transactions.
The LHRC’s case is anchored on Article 138 (1) of the constitution that touches on conditions of taxation.
It reads: “No tax of any kind shall be imposed save in accordance with a law enacted by Parliament or pursuant to a procedure lawfully prescribed and having the force of law by virtue of a law enacted by Parliament.”
LHRC has also asked the court to issue a temporary injunction on the use of the new levies pending hearing and determination a judicial review on the matter.
LHRC acting executive director Felista Mauya told The Citizen that they want the court to go for a judicial review and suspend the use of the new regulation levies on electronic transaction.
“We’ve sought for annulment of the regulations because they were introduced in violation of the procedure stated in the Constitution of the United Republic of Tanzania on conditions of taxation.
Also read on: Government goes back to drawing board over levies
Respondents in the case are the minister for Finance and Planning and the Attorney General.
The government has asked and granted 14 days to file their response on the case that will be mentioned on September 20.
Debate has been raging for over a month now after the government amended the the Parliament amended the National Payment System Act and their subsequent regulations which introduced the new levies.
Like levies introduced on mobile money transition, the new levies have also been met with strong criticism from various quarters.
In August last year LHRC filed a case in the High Court to challenge levies on mobile money transaction.
The levies came after the government amended the Electronic and Postal Communication Act by imposing a levy on all mobile money transaction.
In the case that is still pending in the Court of Appeal, LHRC was asking for a judicial review on the National Payment System Act and its regulations that imposed levies on financial transactions by telephone.
During his budget speech for the financial year 2022/2023 Finance minister Mwigulu Nchemba announced the introduction of a levy to electronic money transactions through a payment system licenced under the National Payment System Act on all transfers and withdrawals transactions involving money.
LHRC has argued that the newly introduced levy has been made beyond legal powers of the law that established it for the National Payment System Act was not vested with powers to create sources of revenue for the government through charging a levy on electronic money transaction by users.
According to LHRC, the Government Notice number 478V of 2022 published on July 1, 2022 has contravened the constitution of Tanzania and was made in violation of the procedure under which laws are made.
The centre has argued further that the notice was illegal, unreasonable, arbitrary and unfair and has created a burden on overly taxation of the users unjustifiably.
“The finance minister and the Attorney General had no justification in law or otherwise to issue such Government notice without following the procedure provided by law, thereby being in breach of the parent Act and the constitution as well,” reads part of the application.
