Zanzibar collects Sh17 billion from mobile transaction
What you need to know:
- Dr Suleiman had raised concerns that while mobile communication services, including data, voice calls, and mobile money transactions, have grown significantly, the distribution of tax revenue between Zanzibar and mainland Tanzania remains unclear.
Unguja. Zanzibar has collected a total of Sh17.985 billion in mobile transaction taxes over the past two years, from 2022/23 to 2023/24. This amounts to an average of Sh8.992 billion per year.
The announcement was made by the Minister of Finance and Planning, Dr Saada Mkuya, on November 27, 2024, in response to a question from Dr Mohammed Ali Suleiman, the Member of Parliament for Mtambwe, during the 17th session of the Zanzibar House of Representatives.
Dr Suleiman had raised concerns that while mobile communication services, including data, voice calls, and mobile money transactions, have grown significantly, the distribution of tax revenue between Zanzibar and mainland Tanzania remains unclear.
In her response, Dr Mkuya explained that mobile transactions are subject to two types of taxes: Value Added Tax (VAT) and excise duty.
However, these taxes are not shared between Zanzibar and the Union, as each side has its own laws governing the taxation of mobile transactions.
"Over the past two years, during the official collection period from 2022/23 to 2023/24, a total of Sh17.9 billion was collected from mobile transactions," said Dr Mkuya.
The revenue from mobile transactions is deposited into the Zanzibar Revenue Authority (ZRA) accounts and then transferred into the treasury, just like other government revenues collected on the island.
"Instead of being transferred directly into the main treasury fund, Zanzibar's share is allocated for use according to the approved budget," Dr Mkuya added.
She further explained that the ZRA collects taxes from various mobile communication services, including goods and services related to mobile transactions.
These taxes are collected electronically to ensure a fair distribution of revenue between Zanzibar and mainland Tanzania.
"The division of mobile transaction taxes between the two sides is based on where the transaction takes place," Dr Mkuya clarified.
To ensure effective management of these taxes, Dr Mkuya noted that guidelines have been established for the collection process, and a team of experts has been formed to address any issues and find solutions.
