The government of Tanzania has reduced the amount of the Mobile Money Tax, which was introduced in July. It decreased it by 30%. In other words, the tax, which formerly ranged from 10 to 10,000 Tanzanian shillings (0.0043 to 4.31 USD) depending on the size of the transaction, now ranges from 7 to 7,000 shillings. In addition to the tax cut, the government was able to persuade telecom carriers to lower their mobile rates by 10%.
“The government believes that the decision would bring relief to the population and will allow it to raise cash to implement various development initiatives,” the Ministry of Finance and Planning said in a statement. Funds that will be utilized to fund, among other things, school development, social housing, and health-care investments.
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The government’s decision to lower the government mobile money tax comes after the public outcry it sparked after it went into effect on July 15th. The people who objected to the high price claimed that it was incompatible with the country’s financial inclusion program. Faced with this strain, President Samia Suluth Hassan instructed the Minister of Finance and Planning, Mwigulu Nchemba, and his colleagues in information technology, Faustine Ndugulile, to investigate a reduction in these expenditures a few days later.
The state initially planned to collect 5 trillion shillings ($ 2.1 billion) from the tax over a five-year period. It planned to raise revenue of 1, 254 trillion Shillings for the exercise 2021/22 in order to partially fund the 36.68 trillion trillion budget. These projections will almost definitely be revised down.
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Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
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