Telecoms happy with the levy review

Tuesday July 27 2021
Telecom pic

Tamnoa chairman Hisham Hendi. PHOTO | FILE

By Alex Nelson Malanga

Dar es Salaam. Mobile phone operators are happy with a recent decision by the government to review its new levy on mobile money transactions.

In an effort to raise revenue by Sh1.254 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306) by imposing a levy of between Sh10 and Sh10,000 on mobile money transactions, depending on the amount sent and withdrawn. A calculation of the charges indicates that, for example, sending Sh1 million to someone and withdrawing same at destination costs Sh31,000 in the current and new charges in total. Tanzanians believe the amount being deducted was just too high for them to carry and that it was going against the country’s financial inclusion agenda. In reaction to the public outcry, the Finance and Planning minister, Dr Mwigulu Nchemba, said recently that President Samia Suluhu Hassan has directed her lieutenants to review the levy. And, last week, Treasury permanent secretary Emmanuel Tutuba told The Citizen that working on directives from the Prime Minister, Mr Kassim Majaliwa, the government has formed a team of experts that will review the mobile money levy and come up with recommendations on July 29 this year.

The Treasury permanent secretary Emmanuel Tutuba told The Citizen yesterday that the team will look into the implications of the levy which had been roundly criticised since its became effective on July 15.

In response to the decision, Tanzania Mobile Network Operators Association (Tamnoa) said in a statement yesterday that the decision will build investors’ confidence and attract new projects in the telecoms industry.

Tamnoa chairman Hisham Hendi said since the levy became effective, mobile money transactions have gone down by 45 percent. This, he said, has adversely affected the telecom firms’ revenues and their overall contribution to government taxes. “We sincerely appreciate what the government has done so far, and we particularly salute President Hassan and the government for responding to the public outcry,” said Mr Hendi, who doubles as chief executive officer for Vodacom Tanzania. He said millions of customers, especially those in rural areas, had almost stopped using their services due to rising costs. The team, formed to review the levy, will consult with telecommunication companies as well as the Bank of Tanzania (BoT).

The team comprises experts from the BoT, Tanzania Communications Regulatory Authority, ministry of Finance and Planning and the Communications Technology ministry.

Advertisement

Mr Hendi was optimistic of the findings of the team to enable the government achieve its goal of raising more taxes to finance various development projects.

but also to ensure mobile network operators also survive in the tough market.

He said the country has of late experienced an economic boom in Africa, thanks to huge investments in the mobile phone sector which in turn has contributed in pushing forward the social and economic value.

According to the latest research findings by the Global System for Mobile Communications (GSMA) released in March, affordable mobile sector-specific taxes could improve digital inclusion and boost agriculture and health.

The public have largely criticised the new taxes for being too high for ordinary citizens to afford.