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The Impact of a Mobile Money Levy on Household Welfare: Evidence from Tanzania

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  • Paul, Revocatus Washington
  • Sharma, Dhiraj

Abstract

This paper examines the welfare effects of Tanzania’s 2021 levy on mobile money transfers, a policy that sharply increased transaction costs in a country where mobile money is the primary channel for financial access and remittances. Using two waves of the Tanzania National Panel Survey (2014/15 and 2020/22) combined with high-frequency phone survey data, a triple-difference identification strategy was implemented to isolate the impact of the levy on rural and urban households before and after its introduction. The findings show that rural households—who rely more heavily on mobile money and have fewer financial alternatives—experienced a 10–18 percent decline in per capita food consumption and a significant rise in food insecurity following the levy. Robustness checks using variation in bank penetration, shock incidence, and remittance dependence support these results.

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  • Paul, Revocatus Washington & Sharma, Dhiraj, 2025. "The Impact of a Mobile Money Levy on Household Welfare: Evidence from Tanzania," Policy Research Working Paper Series 11228, The World Bank.
    • Handle: RePEc:wbk:wbrwps:11228
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    References listed on IDEAS

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