Transaction levies are all about solidarity, says Mwigulu
What you need to know:
- "This tax is not a business tax nor is it derived from business profits, but it was established as solidarity fund so that we can get resources to implement projects that are necessary for the public,"
Dar es Salaam. Days after the new electronic transaction levies took effect causing a public outcry the government has noted that levies are a solidarity funding plan which will enable the country to execute nearly Sh30 trillion backbone projects.
The projects are said to include the construction of Standard Gauge Railway (SGR) and Nyerere Hydropower Project.
The authorities also said the levies, will be used in implementing various social projects like construction of health centers, classrooms and roads especially in rural areas.
According to the finance and planning minister, Mr Mwigulu Nchemba, levies was established in 2021 so that to pool resources from every Tanzanian to implement projects that are important for the nation yet they miss out on funding from the main national budget.
Speaking on Thursday September 1, during a media briefing on the levies finance minister said , he knows the pains in paying levies but there is no way Tanzanians can skip that.
"This tax is not a business tax nor is it derived from business profits, but it was established as solidarity fund so that we can get resources to implement projects that are necessary for the public," he said.
He said it is a must that Tanzanians should bear the basic responsibility of building their country , especially through the strategic development projects being implemented.
Mr Nchemba said the need for a national budget expansion has greatly increased due to strategic projects and other large projects implemented in various parts of the country.
"The need for our budget as a country has increased significantly, and it has increased because of the basic responsibilities that we implement,” he said.
He added: In the East African and Southern African Development Community (Sadc) countries, there is no country that has implemented such mega projects like Tanzania at once, and due to that every Tanzanian should feel proud.
He said that the introduction of levies was as a result of the opinions from the citizens that they are happy with what the president is doing and promised to cooperate with her on implementing the projects and there is no way to do so other than paying tax and levies.
However, Mr Nchemba said the government will work on recommendations from public over levies on electronic transactions while inviting more recommendations from ordinary citizens and academicians on how to improve levies.
In other development Mr Nchemba said according to Twaweza report there are citizens that are happy and ready to pay levies despite the fact that others do not supporting it.
But on the other hand, the Twaweza survey that was released last week with government saying that it remains unofficial reveals that levies and fees on electronic transactions could adversely affect the government’s revenue generation targets as Tanzanians shift to other means of sending and receiving money.
The report was based on the 2021 law on charges for electronic transactions which introduced levies on money transactions through mobile phones from July 2021.
Also Read on: Tanzania to reduce mobile money transaction fees by 43%
However, the costs were reduced by 30 percent in September 2021 and were reduced again in July 2022, making a total reduction of 60 percent of the previously set rate.
But, new regulations that came into effect in July 2022 after Parliament amended the National Payment System Act, have since left tongues wagging with experts noting that the move adds to the rising cost of living as well as threatens the circulation of money in the formal sector.
The survey conducted between October 2021 and July 2022 involving 3,000 respondents from the sixth phase (October and November 2021) and the seventh (June and July 2022) that was launched yesterday, showing that 80 percent of the respondents were aware of mobile phone transaction charges, while 34 percent did not support the introduction of such charges.
