What you need to know:
- It is bad to disregard colossal sums raked in by telecommunication firms and commercial banks through exorbitant charges
Dar es Salaam. Telecommunication companies and a bank yesterday responded to the “exorbitant” transaction costs, saying they were ready to sit down with the government and discuss the best way to address the problem on a win-win basis.
Presiding over parliamentary proceedings in the House on Wednesday, Deputy Speaker Mussa Zungu said: “It is bad to disregard colossal sums raked in by telecommunication firms and commercial banks through exorbitant charges. This must be regulated.”
Responding to the concerns separately, Vodacom, Airtel and NCBA Bank showed their readiness to go back to the drawing board while taking into consideration their operation costs.
Vodacom Tanzania Acting managing director Hilda Bujiku said it was possible for them to sit with the government to see how they can make their products cheaper.
She was speaking during the briefing on the company’s Annual General Meeting held here yesterday.
“I can’t state whether we can review our charges or not. What I can say is that we can sit with the government and chart out a way forward on a win-win situation,” said Ms Bujiku.
She said the current charges reflect operational costs.
“We have been making massive investments in our products, but our charges did not change in the past five years,” she recounted.
Responding to the government’s move to cut mobile money transactions levy by between 10 and 50 percent, she said the new drive was encouraging.
“It is something we were wishing for. This will help to recover the loss that Vodacom incurred during the last financial year due to the introduction of mobile money transactions levy,” asserted Ms Bujiku.
During the year ending March 2022, Vodacom recorded a Sh103.8 billion revenue loss due to mobile money transaction levies.
However, it will take time to recover on the grounds that it was no walk in the park to change the behavior of consumers who now believe that telecom services are expensive.
NCBA Bank executive director Julius Konyani told The Citizen that the call for cutting charges came at the right time.
“We are heading towards the end of the year when banks review their tariffs. As banks, we have a room to sit and review our charges to make them even more affordable,” said Mr Konyani.
“We are operating under environments that allow us to grow other avenues of revenues that could compensate possible reduced charges.”
For instance, he said, there was no exclusivity in partnership and thus providing a room for banks to come up with various innovative products.
As a matter of fact, he expounded, a telecom company stood a chance to partner with more than one bank in offering services.
“We can find a way for us to operate competitively, efficiently and with fair prices (charges),” concluded Mr Konyani.
Airtel Tanzania communication director Beatrice Singano told The Citizen that telcos had been having a series of talks with the government on how to make telecom services affordable.
“As Airtel Tanzania, we have been doing all in our power to make sure our products are affordable,” said Ms Singano.
Some Airtel’s initiatives to drive inclusive economy through Mobile money include the establishment of Bila tozo product, she said.
With this product, expounded Ms Singano, Airtel is absorbing the cost of levy when sending and withdrawing money amounting up to Sh29, 999 using Airtel Money.
“This suggests that our customers can send or withdraw the amount (up to Sh29,999) without any additional cost,” she said
She added: “Our services are cheaper and our target is to make it easier for a common man to transact through mobile money.”
Announcing the scrapping of bank services levy and cut in mobile money transactions levy on Tuesday, the Finance and Planning minister, Dr Mwigulu Nchemba, said the government’s levies were accounting for a small share of the total charges in bank services.
For example, he said, sending over Sh3 million electronically, one had to incur a total cost of Sh14,000 with only Sh4,000 going to the government as levy and the rest being taken by banks as tariffs.
In a fresh bid to ease the cost of living for Tanzanians, the government announced the scrapping of the bank services levy and reduction of mobile money transaction levies with effect from October 1, 2022, thanks to strong criticism from various quarters.
Dr Nchemba said the government removed levies on withdrawals of up to Sh30,000 made through bank agents and automated teller machines (ATMs).
He said the scrapped levies will also include those on money transferred from bank accounts to mobile networks, money transferred within the same bank and money transferred from one bank to another.
The government also announced a 10 percent to 50 percent cut on mobile money transaction costs. Currently, the maximum levy stands at Sh4,000.