The National Payment Systems (Electronic Money Transaction Levy) Regulations, 2022 (the “Regulations”) were introduced by the Tanzanian government in July 2022. The Regulations impose a levy on electronic money transactions, including mobile money transfers, airtime purchases, and bill payments.
The levy is imposed on the user of the electronic money service, and is collected by the service provider. The service provider is required to remit the levy to the Tanzania Revenue Authority (TRA) within seven days of the end of the month in which the levy was collected.
The rate of the levy is prescribed in the Schedule to the Regulations. As of November 2023, the levy is charged at a rate of 0.5% on all electronic money transactions.
The Regulations also contain provisions for the monitoring of electronic money transactions by the TRA, and for the imposition of penalties on service providers who fail to comply with the Regulations.
The National Payment Systems (Electronic Money Transaction Levy) Regulations, 2022 are intended to broaden the tax base and increase the government’s revenue collection. The levy is also intended to discourage the use of cash and promote the use of electronic money transactions.
Here are some examples of how the National Payment Systems (Electronic Money Transaction Levy) Regulations, 2022 apply in practice:
- If you send TZS 10,000 to a friend using your mobile money service, you will be charged a levy of TZS 50 (0.5%).
- If you purchase TZS 5,000 of airtime using your mobile money service, you will be charged a levy of TZS 25 (0.5%).
- If you pay a TZS 20,000 utility bill using your mobile money service, you will be charged a levy of TZS 100 (0.5%).
The National Payment Systems (Electronic Money Transaction Levy) Regulations, 2022 have been welcomed by some as a necessary step to increase government revenue and promote the use of electronic money transactions. However, others have criticized the levy, arguing that it is a regressive tax that will disproportionately impact low-income earners.