(Unguja) – Zanzibar has collected TSh 17.985 billion (approximately USD 7.2 million) from taxes on mobile transactions over the past two years, averaging TSh 8.992 billion (USD 3.6 million) annually. This revenue is attributed to taxes imposed on mobile money and communication services under Zanzibar’s taxation laws.
The information was shared by Finance and Planning Minister Dr. Saada Mkuya during a session in Zanzibar’s House of Representatives on November 27, 2024, in response to a question raised by Mtambwe Representative, Dr. Mohammed Ali Suleiman.
Dr. Suleiman questioned the clarity of revenue-sharing between Zanzibar and mainland Tanzania despite the significant growth in mobile transaction volumes, data usage, and communication services.
In her response, Dr. Mkuya clarified that mobile transactions in Zanzibar are subject to two taxes: Value Added Tax (VAT) and Excise Duty. These are enforced under the VAT Act No. 4 of 1998 and the Excise Duty Act No. 8 of 2017.
She emphasized that these taxes are not part of the Union’s shared revenue structure, as Zanzibar and mainland Tanzania each have their own taxation frameworks governing mobile transactions.
Between the 2022/23 and 2023/24 financial years, the collected TSh 17.9 billion has been deposited into the Zanzibar Revenue Authority (ZRA) accounts and subsequently transferred to the Zanzibar Treasury Fund. The funds are allocated for government expenditure in line with the approved budget.
ZRA collects these taxes through various channels, including the sale of products and services related to mobile communication. Tax collection is facilitated by an electronic system that separates revenue generated from Zanzibar and mainland Tanzania.
According to Dr. Mkuya, the revenue is allocated based on the geographical origin of each transaction. This ensures that taxes from transactions conducted in Zanzibar remain within the region’s financial system.
To address challenges and enhance the efficiency of mobile transaction tax collection, Zanzibar has implemented guidelines and established a team of experts to streamline operations and resolve any issues.
Table: Mobile Transaction Tax Revenue in Zanzibar
| Financial Year | Revenue (TSh) | Revenue (USD Approx.) |
|---|---|---|
| 2022/23 | 8.992 billion | 3.6 million |
| 2023/24 | 8.993 billion | 3.6 million |
| Total | 17.985 billion | 7.2 million |
Table: Key Taxation Laws Governing Mobile Transactions
| Tax Type | Governing Law | Year Enacted |
|---|---|---|
| Value Added Tax (VAT) | VAT Act No. 4 | 1998 |
| Excise Duty | Excise Duty Act No. 8 | 2017 |