GOVERNMENT ABOLISHES LEVIES ON ELECTRONIC TRANSACTIONS

 

Finance and Planning Minister, Dr. Mwigulu Nchemba delivers a statement on financial transaction levies at the National Assembly in Dodoma yesterday.

The government has reviewed mobile money transaction levies by scraping some fees and reducing others, as several Members of Parliament hailed the move, terming it as a clear demonstration of the government that listens to its people.

Minister for Finance and Planning, Dr Mwigulu Nchemba announced the government decision in the National Assembly on Tuesday, immediately after the Questions and Answer Session.

According to the minister, the fees imposed on transactions carried out from bank accounts to mobile phones, and vice versa, will no longer be charged.

Another fee scrapped by the government involves transactions carried out within the bank (intra bank transactions) and between banks (inter-bank transactions).

In the new financial measures announced on Tuesday, merchants will continue enjoying the tax holiday as it is stated in the Electronic Money Transaction Levy Regulations 2021.

The government also waived mobile money levy that was imposed on withdrawal transactions from banks’ agents and Automated Teller Machines (ATM). However, the waiver will only involve money transactions not exceeding 30,000/-.

According to the minister, the government also reduced by between 10 and 50 per cent the levy on other transactions performed, depending on their thresholds.

“It should be remembered that the fees had earlier been reduced by 30 percent, that is from the maximum amount of 10,000/- to 7,000/- but President Suluhu Hassan wanted the charges to be reduced further, ” the minister told the august House.

“Following the President’s directive, we further reduced the mobile money transaction fees from the maximum amount of 7,000/- to 4,000/-,” Dr Mwigulu added.

In the statement issued on Tuesday by the finance minister, the withholding tax on house rent will no longer be collected by tenants, instead the tax will be performed by the Tanzania Revenue Authority (TRA) under an arrangement that will be stipulated in the regulations.

The minister insisted that the withholding tax on rent is required to be paid by the landlord who receives the payment, and not the tenant.

The minister informed Members of Parliament that the new financial measures announced yesterday will take effect on October1, 2022.

In his statement Dr Mwigulu said the government revenue gap that will be created after the waiver and reduction of mobile money transaction levy will now be bridged by a number of measures, including cutting down internal government expenditures (Other Charges).

“After the government has taken this decision, I hereby direct the Paymaster General and all Accounting Officers to look afresh into all votes meant for Other Charges so that we don’t affect implementation of development projects,” the minister ordered.

The minister listed some areas of internal government expenditures that should be looked at as including recreation (tea and snacks) internal and foreign trips, workshops, seminars, training and concerts.

According to the minister, the government was forced to institute the measure for the objective of stimulating money circulation in the market, reducing the burden on the public, simplifying tax administration, encouraging people to perform money transactions and avoiding double taxation.

However, Dr Mwigulu said while the public has been speaking negatively on the e-money transaction fees, the reality is that charges imposed by mobile money service providers are high compared to those that were imposed by the government.

Giving an example, the minister said while the bank imposes the charge of 2,443/- for the withdrawal transaction of 15,000/- the government fee was 243/- only.

The minister rubbished claims that it had constituted a special task force to review the charges, saying the task was carried out by experts from the Ministry of Finance and Planning as part their ordinary duties.

Recently, CCM National Chairperson, President Samia Suluhu Hassan led the party’s Central Committee (CC) meeting after which the organ directed the government to review the charges.

Reacting to the latest move, a cross-section of Members of Parliament have commended the government for listening to ‘wananchi’ and working on their complaints.

“I applaud the government for listening to wananchi’s concerns … The first responsibility of any government in the world is to ensure comfort, peace and safety of its people,” Ms Condester Sichalwe (Momba – CCM) said yesterday after the session.

She further added that no government can continue to lead peacefully if its citizens complain.

The MP said the government had good intentions to ensure that the levies and other charges are used to support development projects that will benefit every Tanzanian.

For his part, Mwanga legislator, Mr Joseph Tadayo said that the introduced levies contributed significantly in improving health and education sectors, and remained convinced that the government will come up with new plans to swell its revenue collection to continue implementing various projects.

“The government wants to implement development projects but it also doesn’t want to hurt the wananchi,” Mr Todayo said.

Namtumbo MP, Mr Vita Kawawa said that the levies were imposed by the government with good intention meant to execute development projects. He added that in a short period of time, through the levies the government was able to finance construction of dispensaries, health centres, roads and bridges in the villages.

“The intention of the government was good but due to the recession in the world economy caused by Covid-19 pandemic and Russia-Ukraine crisis, commodity prices have gone sky-high, negatively impacting many people. Income is less visible to people, so it will be tough to take a little from what they have,” Mr Kawawa.

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