Tanzania Mobile Money Levy Impact Assessment - September 2023

On-net P2P transfers 369%, from TZS 407 to 1907 ($0.18 - $0.83).10 suffered the highest fee increase ranging from 38% to FIGURE 2 PERCENTAGE INCREASE OF AVERAGE TRANSACTION FEE IN JULY 2021 COMPARED TO JUNE 2021, PER TRANSACTION VALUE 400% 369% 350% 300% 250% 200% 150% 100% 50% 0% 99 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 0 0 0 - 9 19 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 0 0 0 - - 2 9 39 49 69. [...] VAT (18%) and excise duty (10%).11 In July and August From September 2021, the proportion of tax reduced 2021, taxes on mobile money fees represented 60% of to 56% of mobile money fees following the reduction total transfer cost, on average, due to the new mobile of the levy by the Government and the reduction of money levy.12 In particular, the average share of taxes fees by mobile money operator. [...] 5% of transaction value when first introduced FIGURE 6 MOBILE MONEY LEVY AS A % OF TRANSACTION VALUE 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% 99 99 99 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 0 0 0 -19 29 39 49 9 9 9 9 9 69 99 9 9 9 9 99 99 99 99 99 99 99 99 99 99 99 0 0 0 0 0- 0- 0- 0- 0- -1 4 19 9 9 9 9 9 9 9 9 9 9 9 9 00 00 0 0 0 0 0 0 0 0 0 - -2 -3 -4 -9 -19 29 39 9 9 9 9 90 0 0 0 - - -4 5 6 7 8 0 0 0 0 10 20 3. [...] 14 / 22 The reduction of mobile money revenue and usage The analysis above, points to longer term impacts means that the economy will not reap the productivity of the levy on mobile connections and the wider benefits of mobile money services. [...] As the levy impacts the vulnerable and the poorest the most evidence above points out, consumers have shown leading to reversal of the digital and financial inclusion an aversion to the use of mobile money since the gains that Tanzania has achieved over time, the potential introduction of the mobile money levy and despite exclusion from the formal economy for millions of mobile money providers’ ef.