Tanzania: Concern As Higher Banking Fees Come Into Effect Today

Friday, July 1, 2016

Dar es Salaam — Commercial banks have announced an increase in transaction fees of 18 per cent effective today.

Stakeholders say the increase threatens to reverse gains made in financial inclusion in the country. Banks have announced that fees charged on services such as withdrawals would increase following the government’s decision to impose 18 per cent value added tax (VAT) on the charges.

The government is targeting the billions of shillings banks have been earning in transaction fees, but, as expected, the additional cost has simply been passed on to customers. This, in turn, would increase the tax burden on low income earners, making banking a costly undertaking, according to stakeholders.

 Records show that the five biggest banks raked in Sh58 billion in fees and commissions in the first three months of this year, making the earnings a significant part of their profits.

Source: All Africa (link opens in a new window)

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