Vodacom blames revenue losses on mobile money tax

20 September 2022

Vodacom Tanzania said the government-imposed tax on mobile money transactions has impacted its revenue for the financial year ended March 2022.

In its latest annual report, the company said it recorded total revenue of Sh956.5bn (US$410.1m) on its various services. This figure represents a 1% decrease from the Sh966m earned in 2021.

According to Thomas Mihayo, the chairman of the board of directors, "this tax has significantly increased the cost of mobile transactions for customers, leading to more than 1.3 million people immediately opting out of our M-Pesa services". In addition to the impact on financial inclusion, the tax has had a negative impact on the company's estimated revenue of Sh103.8bn.

In July 2021, the Tanzanian government introduced a tax on mobile money in an effort to raise funds to build roads and water projects in rural areas, among other things. However, the tax has been met with anger from the public and industry stakeholders. Dodoma reduced the amount to be collected by 60% within a year. In September 2021, levies were reduced by 30% and then by a further 43% from July 1, 2022.

In its Tanzania Mobile Money Levy Impact Analysis report covering the period from July 1 to December 31, 2021, the Global System Operators' Association (GSMA) said mobile money revenues fell sharply from Sh76bn to Sh54bn per month between June and August, stabilizing at Sh55bn in September 2021. The revenue curve then began to recover, rising to Sh65bn by December 2021.