Mobile money users in Tanzania are going back to cash payments to avoid high transaction charges imposed by the government. These taxes have caused a drop in mobile money revenues and a decline in usage, impacting financial inclusion.
In 2021, Tanzania introduced taxes on mobile money transactions, leading to significant revenue reductions despite later reductions in the levies. This shift was discussed at the Mobile World Congress (MWC) 2023 event in Kigali, Rwanda.
Mobile money is widely used in Tanzania, with 72% of the population using it. However, these taxes have led to decreased person-to-person and cash-out transactions.
This issue isn't limited to Tanzania; Kenya has also seen business owners shift to cash payments due to increased compliance checks. Mobile money services play a crucial role in the region, promoting transparency and tax payment.
The tax-driven move away from mobile money in Tanzania is seen as a threat to financial inclusion and economic growth.
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