The Tanzanian Model for Taxing Mobile Money: Scrap it, Reform it, or Let it Be?

In this policy brief, we examine the approach adopted by the Government of Tanzania to taxing electronic payments, including mobile money. We start with an overview of the current framework of taxation for electronic payments and its history, and then review how the market for electronic payment services has developed since 2013, when excise duty was first applied to them. We analyse the current tax burden on electronic payments and consider how the design of the taxes that have been imposed on them measures up against a number of criteria, including the fundamental principles of taxation and alignment with the government’s digitalisation ambitions. We offer a number of possible directions for reform, based on our conclusions, and set out the data and analysis that will be needed to evaluate them fully. We conclude with suggestions for action.