Tanzania: Driving social and economic value through mobile-sector tax reform 2021
Globally, more than 5 billion people are using mobile technology to access life-enhancing services such as financial services, e-government platforms and digital health services. Mobile is an important driver of economic growth across all sectors. In Africa, the International Telecommunication Union (ITU) estimates that a 10% increase in mobile broadband penetration would yield a 2.5% increase in GDP per capita.
A conducive regulatory environment is required to accelerate countries’ digital transformation and maximise the benefits of connectivity for businesses, citizens and governments. An important element of this is the tax framework, which has the potential to unlock digital inclusion by striking the right balance between capturing revenues for the government and supporting connectivity adoption and usage.
This report presents the current state of mobile sector taxation in Tanzania and provides recommendations to improve connectivity through tax reform. The study takes a holistic approach and quantifies the impact of reducing the excise duty on mobile airtime from 17% to 12% — on the mobile sector, the wider economy and, in particular, the agricultural and health sectors.