Tanzania activists petition the controversial 'mobile money levy'

By Our Correspondent, DODOMA Tanzania

More than 3,200 people have signed an online petition to have Tanzania government immediately amend Finance Act 2021/2022 and abolish the regressive tax on mobile money transactions.

Finance and Planning Minister, Mwigulu Nchemba

In an effort to raise its revenue collections by Tanzania shillings 1.254 trillion to partly finance the TSh36.68 trillion budget for the 2021/22 financial year, the government last month amended the Electronic and Postal Communication Act (CAP 306) by imposing a levy on all mobile money transactions.

A calculation of the charges indicates that sending TSh1 million ($431.23) to someone and having the money withdrawn will cost a total of TSh31,000 ($13.37) if all the current and new charges are added up.

The levy, which became effective on July 15, has since been roundly criticised as people believe the amount being deducted was just too high for Tanzanians to carry.

The petition was published by Change Tanzania, a social movement focused on bringing positive and sustainable change in the East African country. 

The petitioners argue that the tax is regressive as it proportionately impacts lower amount transactions.

“The tax on Tshs1,000 makes up 28.7% of the amount while on Tshs 1 million, the tax is only 0.6% of the total amount; clearly a heavy burden on those who can least afford the tax." The petition reads.

They further argue that the law enactment was not participatory; stakeholders and ordinary citizens were not consulted properly or involved in the entire process.

The petition reads that the tax has a wider impact on the revenue of mobile money agents after a drastic reduction in transactions that has already been witnessed in the first few days of the tax.

“This additional regressive tax on the mobile economy disincentives further investment in the entire sector and increases the cost of doing business and payments for small and medium enterprises who are the key taxpayers.”

“With this petition, we the people of Tanzania, call on the government to immediately take an amendment with certificate of urgency to the Parliament to amend the Finance Act 2021/2022, abolish the tax and revise all taxes related to the mobile industry.” Petitioners cried, advising the government to increase development funding by reducing significantly its recurrent expenditure, stem corruption and excess waste, instead of inventing new taxes.

As the outcry intensifies, the government has decided to suspend the execution of the levy following instructions from President Samia Hassan who ordered review of levies on mobile money transactions and address peoples’ concerns over the new taxes.

Finance and Planning Minister, Mwigulu Nchemba said on Monday that President Hassan has heard people’s complaints against the new mobile money levy and that she had instructed the Ministry to work on the matter.

“I urge Tanzanians to remain calm as the government works on the matter…. Their complaints have reached the President and she is concerned about people’s cries. She has instructed that we should work on the complaints,” he said.

He said the experts from his ministry were currently looking at the National Payment System while their counterparts from the ICT Ministry were also looking at the Electronic and Postal Communication Act with a view to identifying issues that need to be clarified and/or rectified.

Since its introduction, the government’s so called “Patriotism Levy” has caused a drastic fall of business of Tanzania Mobile operators. - Africa