Financial Crime World

Withdrawal Levy: A New Tax on Mobile Money Transactions

The Tanzanian government has introduced a new levy on electronic money transactions, commonly referred to as the withdrawal levy. This tax is imposed on mobile money transactions, including withdrawals from mobile money accounts or bank accounts at collectors, collector’s agents, or automated teller machines (ATMs).

How it Works

According to the National Payment Systems (Electronic Money Transaction Levy) Regulations, 2022, the levy will be charged at a rate prescribed in the Schedule to these Regulations. The levy is calculated based on the amount of electronic money transaction and ranges from TShs 10 to TShs 4,000.

Calculation of the Levy

  • The levy is calculated based on the amount of electronic money transaction
  • The range of the levy is from TShs 10 to TShs 4,000

Who is Affected

The withdrawal levy applies to all individuals and entities that engage in mobile money transactions, including withdrawals from their accounts at collectors, collector’s agents, or ATMs. This includes:

  • Individuals who withdraw cash from their mobile money accounts
  • Individuals who use their mobile money accounts to make purchases or pay bills
  • Entities that conduct mobile money transactions

How to Pay the Levy

The levy will be deducted automatically from the transaction amount when a customer makes a withdrawal or conducts a mobile money transaction. For example:

  • If a customer withdraws TShs 20,000 from their mobile money account, they will be charged a levy of TShs 383 (based on the Schedule to these Regulations)

Appeals and Penalties

Customers who are aggrieved by the decision of the Authority under these Regulations may appeal to the Minister within thirty days. Failure to pay the levy is considered an offence punishable by:

  • A fine of not less than five million shillings
  • Imprisonment for a term of not less than twelve months, or both

Conclusion

The introduction of the withdrawal levy aims to generate additional revenue for the government and regulate mobile money transactions in Tanzania. The levy will apply to all electronic money transactions, including withdrawals from mobile money accounts or bank accounts at collectors, collector’s agents, or ATMs. Customers are advised to familiarize themselves with the new regulations and comply with the requirements to avoid any penalties.