Why mobile money levies still a puzzle

Saturday August 21 2021
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By Alex Nelson Malanga

Dar es Salaam. It is still a puzzle on when exactly the mobile money transaction costs will go down as the government is still working on a matter.

Speaking to journalists yesterday Finance and Planning minister Mwigulu Nchemba urged Tanzanians to be patient as the government was still engaging stakeholders over the best way to handle the matter in question.

In a bid to enable the government to collect an additional Sh1.254 trillion to partly finance the Sh36.68 trillion-budget, the government had during the 2021/22 budget debate approved the new levy on sending and withdrawing money via mobile phones.

In response, the public unanimously rebuffed the move on the ground that it was a burden to Tanzanians and defeating Tanzania’s financial inclusivity goal.

In what could be described as hopes to the citizens, President Samia Suluhu Hassan had in mid of last month to intervene, directing the Finance Minister, Dr Mwigulu Nchemba to work on the matter.

However, Dr Nchemba yesterday said the government was still engaging stakeholders in order to come up with the best approach that will not leave the burden to the service users.


“The report we had submitted to the Prime minister earlier had some issues to rectify. We are hopefully it will be ready by the end of this month and the government will state its position over mobile money transactions,” said Dr Nchemba.

He wondered why Tanzanians were putting the blame on the government over the new levy, but never pointed an accusing finger at the telcom companies which were getting more than what the government was garnering in levy.

“The government gets only Sh10 in levy for some transactions while on the other hand, telcos get Sh400,” said minister Nchemba.

“You need to be patient as we are working to resolve the matter,” he said, urging Tanzanians to be responsible for paying tax.

Noting that the government needed money to finance development projects, he said, the fate of the country rests on the shoulders of tax payers.

“Tanzania is our country. It is our responsibility to build it (country),” noted the minister.

He said that just in four weeks since the new levy was introduced, some Sh48.48 billion was garnered, the sum which will be used in financing health and education projects.

“We are doing all in our power in ensuring that the garnered revenues are used as intended,” noted minister Nchemba.

Dr Abel Kinyondo of the University of Dar es Salaam told The Citizen that it was hard to speculate on what the government was thinking of over mobile money transactions levy.

He posed the likes of questions; does the government want to shift the levy from Tanzanians to service providers? Or does the government want to completely do away with the levy?

Vodacom Tanzania managing director Hisham Hendi seemed to have been speaking the same script.

Asked on what the minister’s statement (telcos were getting more than the government) meant, he said he could not guess.

However, he exuded his optimism that they would reach a right proposal.

“What we need to do is to engage with the Finance Ministry,”Mr Hendi told The Citizen over the telephone.

The current trend suggests that Tanzanians will for a while continue digging deeper into their pocket for them to access mobile money transactions.

A look at the approved deductions indicate that for Airtel Money subscribers, who used to pay Sh350 in total for sending between Sh15,000 and Sh19,999 on the same network are now required to pay Sh960 to send the same.

While sending the same amount to a different network used to cost Sh550, the same now cost Sh1, 160. Moreover, withdrawing the money will attract more pains whereby they will have Sh2, 010 deducted instead of the usual Sh1, 400.

Those sending between Sh600, 000 and Sh699, 999 on the same network used to pay Sh1, 000 but now, a staggering Sh7, 400. On the same vein, sending between Sh600, 000 and Sh699, 999 from Airtel Money to a different network will now see one coughing Sh10, 700 instead of Sh4, 300.

Withdrawing the money now cost Sh13, 900 up from Sh7, 500. Withdrawing above Sh3 million will now cost Sh19, 000, up from Sh9, 000.

Sending Sh15,000 on Vodacom’s M-Pesa will cost one between Sh970 and Sh2,820 depending on whether the subscriber has been registered or not.

It used to be Sh360 and Sh2, 210 respectively.

Sending Sh600, 000 to an unregistered client will cost Sh17, 700, up from Sh11, 300.

Withdrawing the amount will cost one another Sh14, 400 instead of the usual Sh8, 000.

Withdrawing any amount above Sh3 million will now see one coughing Sh20, 000 from the usual Sh10, 000.