Tanzania: Govt Imposes New Excise Duty On M-Pesa

Mobile operators will now pay excise duty on all M-Pesa commissions, the government has announced.

Unveiling his 2016/2017 national budget, Finance and Planning minister, Dr Philip Mpango, said a new 10 per cent excise duty on mobile money transactions will apply for both sending and receiving transactions.

Only commission on money senders is currently taxed. The main component of fees received by mobile phone service providers in the money-transfer-related services is currently outside the tax net.

Apparently, mobile firms used the loophole to charge less commission on senders and more for the recipients.

The minister said the plan would plug tax evasion loopholes in the ever-expanding mobile money business where billions of shillings are moved annually.

Tanzania has seven mobile operators with about 39 million subscribers by March 2016, according to data from Tanzania Communications Regulatory Authority.

However, about 16 million subscribers are registered with mobile money transfer services.

SOURCE:THE CITIZEN