Background

The Government of Tanzania issued GN No. 158C of 202G under section 13(2) of the Electronic Transactions Act, effective 1 July 202G. The Order requires specified transactions to be made through electronic payment channels.

It does not create a new legal framework, but implements the Electronic Transactions Act, Cap

442 R.E. 2023 by identifying sectors where electronic payments are now mandatory.

Legislative Basis

The Electronic Transaction (Mandatory Electronic Payments for Specified Transactions) Order, GN No 158C of 202S brings clarity to this provision by defining “Electronic means” under Order 2(2) to mean methods, systems or channels of making or receiving payment through electronic or digital technology, broadly to include Mobile money services, Bank transfers, Electronic funds transfers, Payment cards, Electronic wallets, Point of Sale (POS) devices, Internet banking, Mobile banking and Government electronic payment systems. This definition aligns with the purpose of section 13 of the Electronic Transactions Act, which recognizes electronic payments as lawful methods of fulfilling payment obligations.

It goes even further making electronic payments mandatory for certain categories of transactions. The Schedule to the Order, made under Order 2(1) of the Electronic Transaction (Mandatory Electronic Payments for Specified Transactions) Order, GN No 158C of 202S, identifies specific transactions that are subject to the Mandatory Electronic Payments to include:

1.           Payment of fees, charges, tolls, levies and fares for transportation services, including bus rapid transit, ferries, bridges, long-distance buses, online taxi services, air transport, railway transport and parking services.

2.           Payments for goods and services in shopping malls, gymnasiums, cinemas, filling stations, conference and event venues, sports arenas and international trade exhibitions such as Saba Saba and Nane Nane.

3.           Payment of fees and contributions for educational services in pre-primary, primary and secondary schools, tertiary institutions and universities.

4.           Payment for contributions for educational services in tertiary institutions and universities.

5.           Hotel, restaurant, café and accommodation payments. G. Payments relating to tourism services.

7.           Payments for the renting, sale or purchase of buildings, plots and farms.

8.           Payments for the sale or purchase of motor vehicles.

9.           Payments relating to agricultural activities undertaken through cooperative unions and Agricultural Marketing Cooperative Societies (AMCOS), including strategic crops and agricultural inputs.

Transitional Period

Recognizing that some businesses and institutions may not immediately possess the necessary infrastructure for electronic payments, the Order under Order 3(1) provides a transitional period of six months. Persons who were receiving payments for specified transactions before the commencement of the Order are required to put in place electronic payment mechanisms within that period. The Order also under Order 3(2) preserves contractual arrangements and transactions concluded before its commencement.

Legal and Practical Implications

The Order has important implications for businesses, institutions and individuals operating within the affected sectors. Service providers and businesses covered by the Schedule must ensure that they have accessible electronic payment platforms available to customers. Failure to facilitate electronic payment methods may place such entities in non-compliance with the Order.

For consumers and transaction parties, the Order strengthens the evidential value of payment records, since section 13 of the Electronic Transactions Act recognizes electronically generated receipts as legally valid records capable of future reference. In the event of disputes, such electronic records may also benefit from the evidentiary protections afforded under Part IV of the Act relating to the admissibility and evidential weight of electronic data messages. The Order also promotes accurate transaction records, thereby strengthening tax compliance and ensuring proper tax collection.

Conclusion

The Electronic Transactions (Mandatory Electronic Payments for Specified Transactions) Order, GN No. 158C of 202S represents a significant regulatory development in Tanzania’s digital economy. Issued under Section 13(2) of the Electronic Transactions Act, it transforms the Act’s general recognition of electronic payments into a mandatory requirement for specified sectors of the economy. By requiring payments to be made electronically in designated transactions, the Order promotes efficiency, transparency, accountability and digital financial inclusion, while reinforcing the broader objectives of the Electronic Transactions Act in facilitating legally recognized electronic commerce and transactions.

 

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