Connecting Africa is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 3099067.

FinTech

Tanzania scraps mobile money tax

Article Image
The Tanzanian government has scrapped its mobile money transfer levy starting October 1, 2022. The scrapping comes three months after the government slashed the transfer levy by 43%.

Aside from mobile money transfers, Tanzania will remove the fee for bank transfers and waive the transaction fee on withdrawal of cash through bank agents and ATMs for values not exceeding 30,000 Tanzanian shilling (US$12.81).

Speaking in the East African country's Parliament, Finance and Planning minister Mwigulu Nchemba said scrapped levies will also include those on money transferred from bank accounts to mobile networks, money transferred within the same bank as well as money transferred from one bank to another.

The minister added that to cover the revenue it will lose from the cancelled levies, the government is looking to cut down expenditure on things such as conferences, training, refreshments, and trips.

"We have decided to review the levies to reduce the burden on society, to foster cash transactions and avoid double taxation," the minister told Parliament.

Nchemba also announced a 10% to 50% cut on mobile money transaction costs, the maximum levy currently stands at TZS4,000 (US$1.72) and with the cut, the maximum levy will be reduced to TZS2,000 (US$0.86).

History of levy

The Tanzanian government is slashing mobile money transfer levy fees because it wants to encourage its citizens to return to using mobile money services. People stopped using the services when the government introduced a transaction levy in the financial year 2021/2022.

In June 2021 Tanzania amended the Electronic and Postal Communication Act (CAP 306) by imposing a levy of between TZS10 (US$0.0043) and TZS10,000 (US$4) on mobile money transactions, depending on the amount sent and withdrawn.

The tax was met with criticism and many Tanzanians stopped using mobile money services – prompting the government to decrease the levy by 30% in September 2021. The levy was further slashed to TZS4,000 (US$ 1.72) in June this year.

These taxes have also had a negative impact on telcos' financials. Despite the strong fintech growth for Vodacom in 2021, it was negatively impacted by new levies introduced on mobile money and airtime recharges in Tanzania.

Mobile money tax in Africa

There has been a move by many African countries to impose taxes on fast-growing digital financial services (DFS) like mobile money.

Cameroon imposed a 0.2% mobile money tax in January. In May, Ghana introduced a 1.5% e-levy on mobile transactions which is hitting the poor the hardest, The Conversation reported.


Want to know more about mobile financial services in Africa? Check out our dedicated Fintech content channel here on Connecting Africa.


Ugandans have been paying 0.5% mobile money tax since 2018 and Zimbabweans have been paying a hefty 2% levy since 2019 which is the highest compared to other countries, Zimbabwe Independent reported.

Related posts:

*Top image source: Image by wirestock on Freepik.

— Matshepo Sehloho, Associate Editor, Connecting Africa

Innovation hub

Story

Hot startup of the month: South Africa's Zoie Health

This month's hot startup is South African digital women's health clinic Zoie Health – a digital app that focuses on family planning, fertility and maternity care.

Story

Orange Côte d'Ivoire launches 5G lab in Abidjan

Pan-African telecoms operator, Orange, has launched a 5G lab in Côte d'Ivoire in anticipation of its 5G network rollout in 2023.

More Innovation hub

Partner perspectives

5G is lighting up the future of North Africa
By Chris Meng, VP of Huawei Northern Africa Carrier Business Department

The moving target that is telecoms fraud
By Clémentine Fournier, Regional VP Sales, Africa, BICS

How mobile operators in Africa can address signalling threats and secure the network
By Katia Gonzalez, Head of Fraud and Security at BICS

All Partner Perspectives

Africa Tech Perspectives

Story

Women in Tech: Spotlight on inclusivity with Digital Council Africa's Juanita Clark

Digital Council Africa founder and CEO, Juanita Clark, talks to Connecting Africa as part of our Women's Month series about her career and what needs to be done to make the tech industry intentionally inclusive.

Story

Women in Tech: Spotlight on legal tech with Life.file's Sinal Govender

Life.file co-founder, Sinal Govender, talks to Connecting Africa as part of our Women's Month series about her career and how we can encourage more young girls to enter the legal tech field.

Story

Digital inclusion as a catalyst for economic empowerment: Mastercard's Imelda Ngunzu

Mastercard's Imelda Ngunzu talks to Connecting Africa about how digital payment solutions and mobile money are transforming the lives of small business owners, women and marginalized groups in East Africa.

More AfricaCom perspectives

Latest video

More videos

Industry announcements

More Industry announcements

Guest Perspectives

Story

Omdia View: July 2022

By Omdia Analysts

Kenya and Zambia move towards 5G with new spectrum allocations while Tunisie Telecom plans to shut down its 3G network - that and more in this month's Omdia View.

Story

Omdia View: June 2022

By Omdia Analysts

5G was the major news trend across Africa in June, as Orange became the first operator to launch 5G in Réunion and operators in Senegal accelerated their 5G plans despite spectrum delays.

More Guest Perspectives

Upcoming events

Africa Tech Festival
November 7-11, 2022
CTICC, Cape Town
More Upcoming events

Archived webinars

Africa Green ICT: Lighting Up a Sustainable Continent

The ICT industry is the leading industry in the commitment to carbon neutrality, whose focus has shifted from setting ambitious targets to taking initiatives. The push for zero-carbon and for green energy development, it isn't just about CSR – it's also good for sustainable business.

The path to sustainable development requires green energy. Governments are looking at potential policy approaches to make green energy more widely available and affordable. Without sustainable energy, there will be no digital transformation and no chance of making Africa more economically competitive in the post-pandemic era.

Africa Green ICT Webinar 2022 will bring together ICT industry leaders and senior industrial analysts to provide insight, best practices and key learnings on how to achieve zero-carbon targets and practice green development in Africa.

More Webinars

Sponsored video

More videos

Flash poll

All polls

Like us on Facebook

Newsletter Sign Up


Sign Up