Key Highlights

• The Electronic Transactions (Mandatory Electronic Payments for Specified Transactions) Order, 2026, Government Notice No. 158C of 2026, effective from 1 July 2026, makes electronic payment a legal requirement for specified transactions.
• Businesses and investors operating in the covered sectors must establish compliant electronic payment systems within the prescribed transition period.
• The Order creates opportunities for digital transaction transparency, improved financial records, easier reconciliation and enhanced tax compliance.
• Businesses should also consider digital payment risks, including cybersecurity, data protection, system reliability and customer readiness.
• For investors, the shift towards electronic payments supports Tanzania’s broader transition towards a more formal, transparent and digitally integrated economy.

1. Introduction

Legal reform is often a reflection of a nation’s economic vision and preparedness to embrace future developments. William Gibson, the renowned Canadian-American speculative fiction author widely credited with popularizing the concept of cyberspace, in 1999 during a National Public Radio interview, made a remark that “As I’ve said many times, the future is already here – it’s just not very evenly distributed.”

Although made over two decades ago, Gibson’s observation remains remarkably relevant to today’s digital economy. This captures the reality that technological innovations existed long before they became universally accessible or widely adopted. While some countries rapidly embrace digital transformation through advanced technology, progressive legal frameworks, and widespread public adoption, others continue to transition gradually as their infrastructure, regulatory environment and financial ecosystem evolve. In such cases, the journey towards a paperless economy has become a defining feature of modern economic development worldwide.

Tanzania’s financial sector has undergone a significant digital transformation. Mobile money, digital banking, POS and QR-code payments have expanded access to electronic financial services, while the Government Electronic Payment Gateway (GePG) has enabled electronic payment of taxes, fees, levies, licences, and other Government payments. Mobile money agents and other expanding network operators have further extended access, including in rural areas, and electronic payments are increasingly used in transport, retail, hospitality, education and other commercial and public service activities.

Despite this progress, cash remains important, particularly within informal commercial activities, while diversity in internet connectivity, electricity reliability, smartphone ownership and digital literacy continue to affect access. The need to formalize transactions, improve transparency and strengthen tax administration provides an important context for the Electronic Transactions (Mandatory Electronic Payments for Specified Transactions) Order, 2026, published as Government Notice No. 158C of 2026.

Considerably, Tanzania has adopted a regulatory approach to accelerate a transition that other jurisdictions have pursued through technology, market adoption and regulation. This article examines the Order, Tanzania’s payment ecosystem, its commercial and economic implications, and the principal challenges in achieving an inclusive and sustainable paperless economy.

2. Understanding the New Mandatory Electronic Payment Regime

On 30th June 2026, the Government of Tanzania, through the Ministry of Finance, enacted the Electronic Transactions (Mandatory Electronic Payments for Specified Transactions) Order, 2026, through Government Notice No. 158C of 2026 (the “Order”). Effective from 1st July 2026, the Order shifts specified commercial transactions from cash-based payments to electronic payments by requiring payments for specified transactions to be made and received electronically. “Electronic means” is defined under the Order to mean a method, system or channel of making or receiving payment through electronic or digital technology, and includes mobile money, bank transfers, electronic funds transfers (EFT), payment cards, electronic wallets, Point of Sale (POS) devices, internet and mobile banking and the Government Electronic Payment Gateway (GePG).

What is the scope of this order?

The Order covers public transport services including BRT, ferries, railways, airlines, online taxis, bridges, tolls and parking; shopping malls, filling stations, conference and event venues, sports arenas and trade exhibitions; educational institutions; hotels, restaurants and cafes; tourism-related services; the sale, purchase or leasing of land and buildings; motor vehicle transactions; and strategic agricultural activities undertaken through Cooperative Unions and Agricultural Marketing Cooperative Societies (AMCOS).

What does it mean?

Individuals, Businesses and Institutions receiving payments in respect of the specified transactions before 1st July 2026 have six months (ending on 31 December 2026), to establish compliant electronic payment systems. Contracts concluded before the commencement of the Order are excluded, ensuring that the new requirements do not operate retrospectively. The Order, therefore, goes beyond just replacing cash to streamline payments in the era of an evolving digital economy by supporting formalization, financial inclusion, transparency and traceable commercial transactions.

3. Tanzania’s Digital Payment Ecosystem: Is the Country Ready?

Tanzania has a substantial foundation for implementing mandatory electronic payments. Electronic payment systems such as mobile money, the likes of M-Pesa, Airtel Money, Mixx by Yas, HaloPesa, T-Pesa, Azam Pesa and Selcom Pesa as well as electronic banking, enable transfers, merchant payments and Government payments through electronic means and even simpler through mobile phones. Commercial banks, on the other hand, provide internet and mobile banking, cards, EFT, POS and QR-code payment solutions.

GePG has strengthened the public payment infrastructure by connecting Government institutions with banks and mobile money operators. Mobile network coverage and the agent network have also improved accessibility, while electronic payments are increasingly used across transport, retail, hospitality, education, health and other sectors.

However, Tanzania’s ecosystem remains less digitally mature than jurisdictions such as Sweden, the United States and, in some respects, Kenya and South Africa. Mobile money remains dominant, while card payments, digital wallets and integrated banking technologies are comparatively less utilized. Tanzania therefore has a workable foundation, but continued investment in infrastructure, interoperability, innovation and public confidence remains necessary.

4. Implications and Critical Analysis: Tanzania vis-a-vis the Global Digital Economy

The Order has significant commercial and economic implications: Electronic payments create verifiable records and audit trails that can assist the Tanzania Revenue Authority (TRA) in reducing under-reporting, strengthening compliance and broadening the tax base. For businesses, digital payments can simplify reconciliation, reduce cash-handling risks, improve financial reporting and enhance customer convenience.

Mandatory electronic payments may deepen financial inclusion: This is by encouraging individuals and small businesses that are traditionally dependent on cash to participate in the formal financial system, potentially improving access to savings, credit, insurance and other digital services. For investors, transparent and traceable payment systems reduce transaction risks and position Tanzania as an attractive investment destination.

Even though Tanzania’s legislative approach may differ from jurisdictions where electronic payments have become dominant largely through technological innovation, convenience and consumer confidence, the newly enacted Order will accelerate adoption, but long-term success will highly depend on affordability, reliable infrastructure and public trust. Greater interoperability among banks, payment institutions and mobile money platforms will also be essential. A country like Kenya demonstrates the potential of mobile money (M-PESA) to transform commerce, while Tanzania must continue developing an integrated and competitive ecosystem.

The digital economy is also evolving beyond conventional electronic payments: Artificial Intelligence (AI), Open Banking, Buy Now Pay Later (BNPL), embedded finance, digital identity systems, Central Bank Digital Currencies (CBDCs) and cryptocurrencies are reshaping financial services globally. The Order addresses mandatory electronic payments for specified transactions. This means the Order is primarily focused on existing electronic platforms but does not adequately address the growing digital economy and emerging technologies such as AI and digital currencies. Cognizance Tanzania will need continuing legal and regulatory development to respond to emerging technologies.

Cybersecurity and data protection are equally critical: Increased digital transactions expose businesses and consumers to cyber fraud, identity theft, unauthorized access and misuse of personal information. Compliance with the Personal Data Protection regulations, cybersecurity safeguards, institutional capacity and public awareness is therefore essential.

Finally, cash remains significant in Tanzania’s informal economy: while Tanzania continues to advance access to digital services and IoT, limitations in internet connectivity, electricity reliability, smartphone ownership and digital literacy persist in some communities. Therefore, mandatory electronic payments should be supported by reliable and effective digital/technological infrastructure, financial education, and public awareness so that digital transformation promotes inclusion rather than exclusion in Tanzania’s fast-growing population. The success of Tanzania’s paperless economy should not be measured merely by legislation or the number of payment platforms. Its success should be measured by whether electronic payment systems become accessible, secure, trusted, interoperable and beneficial to consumers, especially local communities, businesses and Government.

5. Conclusion

The Electronic Transactions (Mandatory Electronic Payments for Specified Transactions) Order of 2026 marks a significant step in Tanzania’s transition towards a paperless economy. Its potential benefits include modernising commerce, strengthening tax administration, improving transparency and advancing financial inclusion. However, legislation alone cannot deliver a successful digital economy. Tanzania must continue investing in reliable infrastructure, interoperability, cybersecurity, data protection, technological innovation and public awareness while ensuring that regulation evolves with emerging financial technologies. Therefore, the real measure of success will not be whether electronic payments become mandatory but whether they become accessible, secure and trusted by citizens and businesses. Only then will Tanzania move beyond replacing cash with electronic payments to achieve a genuinely inclusive and sustainable digital economy.

About Us

Victory Attorneys & Consultants is a leading full-service law firm delivering exceptional legal and advisory services in tax, financial services regulation, banking and microfinance law, corporate and commercial law, and dispute resolution across Tanzania and beyond. With deep expertise in navigating the intersection between tax statutes and financial regulatory frameworks, we provide strategic guidance on complex assessments, appeals, and compliance obligations, ensuring our clients operate confidently within Tanzania’s evolving fiscal and financial services landscape.

Disclaimer

This article is not intended to offer legal advice but rather aims to provide general information on the subject matter discussed. It does not constitute and should not be relied upon as legal advice. Victory Attorneys & Consultants explicitly disclaims any responsibility for any loss that may occur if this article is relied upon without first seeking professional legal advice from our legal experts. Individuals should consult qualified professionals for tailored legal guidance related to their specific circumstances.

Authored by:
Kelvin Nyagawa
Advocate, Victory Attorneys & Consultants