Phone usage to cost more, budget shows

Dar es Salaam. From July 1, Tanzanians will be paying more to talk on telephones as the minister for Finance, Dr William Mgimwa, announced an increase of tax in all mobile phone services.

The government has announced a 14.5 per cent excise duty on all mobile phone services instead of taxing airtime alone.

Part of the earnings from mobile phone excise duty will be directed toward financing the education sector in the country. According to Dr Mgimwa the government also proposes increase of excise duty on telephones both wired and wireless.

The government is also proposing to initiate excise duty on SIM cards for mobile phone owners in which every mobile phone owner will be supposed to pay Sh1,450 every month as excise tax.

“This kind of tax will be collected by mobile phone companies on behalf of the government,” said Dr Mgimwa in his budget speech.

According to Dr Mgimwa, mobile phone money transfer services agents will now be required to pay 10 per cent of their commission as withholding tax. The money, according to Dr Mgimwa, will also be collected by mobile phone firms.

“All these initiatives aim to increase domestic revenue which in turn will reduce the government from depending on donors to finance its development projects,” said Dr Mgimwa when tabling his budget speech in parliament yesterday.

Tanzanians are becoming increasingly involved in the mobile payment system as evidenced by the growing number of users and access services from various companies.

According to the Tanzania Communication Regulatory Authority (TCRA) the number of voice telephone subscribers rose to 27.4 million in December 2012.