Drop in mobile cash transactions ‘minimal’

Monday August 02 2021
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Chief government spokesperson Gerson Msigwa. PHOTO | FILE

By Josephine Christopher

Dar es Salaam. The government said yesterday that mobile money transactions had dropped “only minimally”, dismissing reports of a massive plunge since the introduction of controversial levies mid-last July.

As part of efforts to raise revenue collections by Sh1.254 trillion to partly finance the Sh36.68 trillion 2021/22 budget, the government last month amended the Electronic and Postal Communications Act (CAP 306) by imposing a levy on all mobile money transactions, based on the amount sent or withdrawn. A calculation of the charges indicate that sending Sh1 million to someone and having the money withdrawn will cost a total of Sh31,000 if all the current and new charges are added up.

The levy had, however, been roundly criticised by Tanzanians from across different walks of life with the Tanzania Mobile Network Operators Association (Tamnoa) saying millions of customers – especially those in rural areas - had stopped using mobile money services due to the rise in costs.

Tamnoa reports show that mobile money transactions had dropped by 45 percent since the levy was introduced. This, they said, had adversely affected telcom firms’ revenues and their overall contribution to government taxes.

But chief government spokesperson Gerson Msigwa said yesterday that there had indeed been a fall in transactions, but claimed that the drop was minimal.

“The situation is not that bad. There has been a small slowdown; but transactions continue on a good trend,” he said.

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According to Mr Msigwa, the team that was formed by Prime Minister Kassim Majaliwa to work on President Samia Suluhu Hassan’s directives on Tanzanians’ concerns over the matter had completed the task and handed over their findings to the Premier on Saturday July 30, 2021.

“Dr Mwigulu Nchemba and Dr Faustine Ndugulile (Ministers for Finance and ICT respectively) have submitted recommendations on how to handle this situation in a manner that doesn’t affect the whole goal of collecting the tax. The Premier has responded with additional directives and, soon enough, the public would be made aware of the resolutions,” he said.

"Mobile money levy was made into a law after Parliament amended CAP 306, and it’s only the House that can revoke it,” Msigwa said.

“But the law allows respective ministers to formulate guidelines on tax collections, and that is what the ministers have worked upon,” he said.

Serving as the new state’s director for Information Services Mr Msigwa also provided updates of other tax collection endeavours by the government in the last quarter of 2020/2021 fiscal year.

He said in the fourth quarter of the last fiscal year the government collected Sh4.41 trillion an average of Sh1.51 trillion monthly, as well as reaching a 93 percent collection target of revenue from councils.

Mr Msigwa also stated feats from the social and economic activities in the country and strategic projects that are being implemented in the sectors including infrastructure, transport and communications, agriculture, electricity and health.


Covid-19 vaccinations

Msigwa says the government plans to vaccinate 60 percent of the population to end transmission of the coronavirus. So far the government has received 1,058,400 doses of the Johnson & Johnson under the Covax facility.

“Through Covax the government expects to get 11 million vaccinations to cover 20 percent of the population, and the plans are to get more vaccinations to the other 40 percent of the population,” he said.