Which way for mobile money levy?

Wednesday July 21 2021
Dillema pic

Finance and Planning minister Mwigulu Nchemba. PHOTO | FILE

By Rosemary Mirondo

Dar es Salaam. The government could now be considering either suspending the mobile money levy law or adjusting the accompanying regulations as it seeks to address people’s outcries over the unpopular levy, analysts observed yesterday.

This comes as top government officials spent a good part of their day yesterday, deliberating on the subject which has attracted public scrutiny and caught President Samia Suluhu Hassan’s attention.

“We are in a meeting to discuss the mobile money levy issue. You will be notified when a decision is reached,” Treasury permanent secretary Emmanuel Tutuba told The Citizen yesterday.

In efforts to raise revenue by Sh1.254 trillion for the over Sh36 trillion budget for the 2021/2022 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306) by imposing a levy of between Sh10 and Sh10,000 on mobile money transactions, depending on the amount sent and withdrawn.

A calculation of the charges indicates that sending Sh1 million and having the money withdrawn will cost a total of Sh31,000 if all the current and new charges are added up.

The levy, which became effective on July 15, has since been roundly criticised as mobile money service users raised voices arguing that the deductions were too costly to afford and that the new tax amounted to sabotaging the country’s financial inclusion agenda.

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On Monday, Finance and Planning minister Mwigulu Nchemba said President Hassan had heard the people’s outcries against the new mobile money levies and had, therefore, instructed the ministry to work on the matter.

Dr Nchemba said since the levy had become legally-binding after Parliament approved the 2021 Finance Act and Appropriation Act, the Ministry of Finance and Planning and that of Information and Communication Technology (ICT) will have to work on the matter via regulations in a bid to bring the users some relief.

The Finance Act 2021 directs the Finance Minister to consult with his Information and Communication Technology (ICT) counterpart and make regulations prescribing the manner and modality under which the levy on mobile money transfer transactions may be collected and accounted for.

A meeting, convened by Prime Minister Kassim Majaliwa, would also propose the way forward in relation to the matter, he said.

Analysts, who spoke to The Citizen, noted yesterday that the only quick solution to the problem was for the government to decide not to enforce the law on mobile levy and instead take it back to Parliament for review in the October sitting. Tanzania Human Rights Defender Coalition (THRDC) national coordinator Onesmo Ole Ngurumo said since the law has been enacted and assented to, the minister’s powers stand and end only on the regulations, which he can either decide to review or cancel.

However, he noted that the only quick solution was for the President, who has the mandate to suspend its execution until it is taken back to Parliament for review as per the procedures of law amendments.

“The levies cannot be resolved without going back to the law. The law becomes operational after it gets signed by the President and therefore, the minister has to take it back to Parliament for amendment,” Mr Ngurumo said.

For his part, an advocate and co-founder and head of Litigation of Law Guards Advocates, Mr Jebra Kambole, said the regulations were enacted by the Minister in charge of Finance, saying the same docket has the mandate to cancelling them [the regulations] and/or reviewing the levies.

“The government can also decide not to implement the law as they await the next Parliament sitting for review,” he said.

The executive director of the Legal and Human Rights Centre (LHRC), Ms Anna Henga, said there were different ways to tackling the issue, including by reviewing the regulations to meet the public requirement following the outcry.

“The government can also decide to return the law to Parliament under a Certificate of Urgency for a review,” she said.

She said the government could also look for ways to implement the law by reducing the levies that are too high through a government circular.

“However, this will mean that the government could decide to simply reduce the amount being levied,” said Ms Henga.