Tanzania has eliminated charges on card payments to boost digital transactions, contrasting sharply with Zimbabwe’s 2% tax on electronic transactions, which has led to a decline in their usage. The article discusses how Zimbabwe’s previous progress towards a cash-lite economy was hindered by government greed, emphasizing the need for policy changes to enhance digital payments in the country.
In recent developments, Tanzania has made strides toward enhancing digital payments by eliminating charges on card transactions, aiming to cultivate a cash-lite economy. This initiative, spearheaded by the Bank of Tanzania, is focused on debit, credit, and prepaid card payments at point-of-sale systems while imposing penalties for non-compliance among merchants. Conversely, Zimbabwe has witnessed a decline in technological advancements in digital transactions following the introduction of the 2% Integrated Money Transfer Tax (IMTT) in 2018, prompting a regression towards cash payments. The Zimbabwean government’s approach has inadvertently stymied progress in digital payment systems, rendering them prohibitively expensive for consumers and merchants alike, highlighting a stark contrast to Tanzania’s forward-thinking strategy. This article explores these developments, emphasizing the critical lessons that Zimbabwe might learn from Tanzania’s proactive measures to promote digital banking.
The disparity in digital payment adoption between Tanzania and Zimbabwe illustrates a significant difference in government policy and its effects on economic behavior. Tanzania’s recent decision to scrap charges on card payments reflects an effort to foster a digital economy, leading to increased financial inclusion and security for its citizens. In contrast, Zimbabwe’s IMTT has had adverse effects, as the government sought to benefit from the rise in electronic transactions through taxation, which ultimately dissuaded users from embracing digital payments. Over the years, various governmental decisions have impacted the monetary landscape in Zimbabwe, often resulting in economic turmoil and diminishing the trust of citizens in electronic transactions.
In summary, Tanzania’s proactive measures in removing charges on digital payment methods present a clear path towards enhancing electronic transaction adoption and financial inclusion. In contrast, Zimbabwe’s reliance on taxation from digital payments has led to a regression towards cash, complicating the already strained monetary environment. The contrasting experiences of these countries underscore the importance of fostering an encouraging economic atmosphere for digital transaction growth, showcasing the potential benefits of removing financial barriers to digital payments.
Original Source: www.techzim.co.zw
