'Patriotic' tax provokes uproar in Tanzania

By Kizito Makoye

DAR ES SALAAM, Tanzania (AA) - Tanzania has imposed a so-called "patriotic levy" tax on mobile money transactions in a bid to boost government revenue, with critics accusing authorities of adding to the burden of the impoverished populace.

"I will not waste my money like that. I would rather stop using the service," said Masudi Mweka, a resident of the port city of Dar es Salaam, about the measure that took effect Thursday.

Mobile phone operators since Wednesday have been urging customers to comply with the new regulation.

Finance Minister Mwigulu Nchemba spoke on national television and insisted that the new levy, which was approved by lawmakers, was entirely for development purposes, adding that the funds raised would help in road construction, water projects and other infrastructure development.

"This levy is important [and] will help us solve pressing needs of our country," he said.

The levy will boost government revenue by 1.254 trillion Tanzanian shillings ($540.74 million) in the 34.88 trillion shillings 2021-2022 budget, according to Nchemba.

"The idea is to involve every single Tanzanian in the development of their country," he said.

Experts, however, say a hefty mobile transactions tax will likely harm the thriving telecom industry and hurt the financial inclusion agenda.

"I don’t think taxing more mobile customers is the right thing to do," said Prosper Honest Ngowi, a professor of economics at Tanzania's Mzumbe University.

Ngowi said the move would frustrate efforts to enhance financial inclusion.

He advised the government to improve internet access and affordable data, which will likely raise revenue without directly hurting consumers.

"Mobile money service must be cheap to attract more customers," he said.

Eva Terry, a mobile money agent in Dar es Salaam, complained that the number of customers fell sharply as people avoided incurring the cost of the tax.

"Since yesterday, I've received very few customers. Some of them hesitate to send money fearing heavy deductions," she told Anadolu Agency.