Tanzania finally reduces mobile money transaction levy after public outcry

Tanzania has finally reduced the amount that it collects from citizens in form of mobile money transaction levy by 30 percent.

The decision comes after weeks of public outcry over the levy.

In an effort to raise revenue by Sh1.254 trillion to partly finance the Sh36.68 trillion budget for the 2021/22 financial year, the government amended the Electronic and Postal Communication Act (CAP 306) in June by imposing a levy of between Sh10 and Sh10,000 on mobile money transactions, depending on the amount sent and withdrawn.

A calculation of the charges indicates that sending Sh1 million to someone and having the money withdrawn costs a total of Sh31,000 if all the past and new charges are added up.

The levy, which became effective on July 15, had been roundly criticised as people believed the amount being deducted was just too high for Tanzanians to carry and that it was going against the country’s financial inclusion agenda.

This forced the government to act.

In July, President Samia Suluhu Hassan directed the Minister of Finance and Planning, Dr Mwigulu Nchemba and his Communications and Information Technology counterpart Dr Faustine Ndugulile to review mobile money transaction charges after heeding to the public outcry over the levy.

And in what sends relief to Tanzanians, the Ministry of Finance and Planning issued a statement on Tuesday, August 31, 2021, saying Dr Nchemba has signed the amendments of the Regulations for Electronic Transactions Levy for 2021 with a view to reduce the rates by 30 percent.

In addition, the statement said, the government has also held talks with mobile service providers who have also agreed to reduce the rates they charge in mobile financial transactions by 10 percent.

According to the statement – which was signed by the head of communications unit at the Ministry, Mr Benny Mwaipaja - stated that the reduced rates will be officially announced tomorrow (September 1, 2021).

"The government believes that the decision will provide relief to the people and enable them to raise funds to implement various development projects….,” the statement reads.