NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

By Kizito Makoye

Tanzania has reduced a controversial levy on mobile money transactions introduced a year ago by 43%, bringing relief to users who were shouldering a heavy burden when sending or receiving money using mobile phones.

Tanzania is among many African nations that have imposed a tax on mobile phone-based transactions, which local analysts say has hurt millions of small businesses and reversed impressive gains in economic inclusion.

Presenting the country’s annual budget for the 2022-23 financial year last week, Mwigulu Nchemba, Tanzania’s finance minister, said the measure is intended to reduce the cost of living for Tanzanians who are facing economic problems.

“I propose an amendment to the national payment system…by reducing the mobile money transaction levy on sending and withdrawing money from a maximum of 7,000 Tanzanian shillings ($3) to 4,000 ($1.72) on each transaction,” he said.

Photo courtesy of Institute for Money, Technology and Financial Inclusion.