Zimbabwe’s Minister of Finance Patrick Chinamasa has just unveiled the country’s 2017 National Budget which has outlined some of the proposals for fiscal management in the coming year.
One of the proposals presented in the address is the introduction of a 5% levy on all mobile phone airtime and mobile broadband. This is expected to go towards a Health Fund.
This becomes the latest form of taxation levied on telecommunications services. In 2014 the government introduced a 5% levy on all airtime purchases for mobile telecoms.
Local mobile operators ended up assuming the 5% levy as a way of ensuring that the cost of airtime for the end consumer wouldn’t be affected. However, all operators have since expressed concerns about the impact that the tax had on their already falling revenues.
It’s likely that this new health levy will also put a dent on telecoms revenues and put further strain on service providers in both voice and broadband services.
12 comments
Some of your assertions are incorrect and not well researched. The 5% excise duty on airtime was not assumed by the operators, it is paid for by the consumer as it was incorporated in the 2016 revised tariffs.
Do share how exactly the user is made to bear the cost? Seeing that you claim facts are not true
Essentially, if you pay $1 for airtime, the MNO has to surrender $0.05 for excise duty on that $1, while at the same time they are fixed as to what tariff they bill subscribers ($0.16/min).
airtime is not the recharge card as you presume. excise levy on airtime just like usf levy is factored into the tariff. https://www.potraz.gov.zw/index.php/categorylinks/133-new-tariffs-january-2016. All levies are passed to the consumer. which is why some tariff categories such as net-on-net actually increased from $0.15 in 2015 to $0.16 in 2016. Even this levy will be inputed to the tariffs
Hold on a minute – the 5% duty on airtime was introduces BEFORE Potraz actually slashed the call rates so how do you say its paid for by the consumer. We actually got a RATES CUT while the MNOs got new tax. That 2016 revisited tariff you mention only went up ONE CENT.
From the reserch I’ve just done: the 5%excise duty was imposed Sept 2014. Potraz slashed call rates from 23 cents per minute to 15 cents in Oct 2014 and then increase to 16 cents in Jan 2016 (the one you cited). I don’t see how the consumer bore that original 5% – the MNOs had to carry that! Of course there are other things in play like data prices, promos etc but it seems your own assertions are equally incorrect based on the evidence you presented.
They explain why tariffs increased in January 2016. It was because of the excise levy. Ive been to ZIMRA meeting on the implementation of the excise levy. It also doesnt apply to voice services but to data as well, all telecommunications.
Then explain why tariffs increased in January 2016. It was because of the excise levy. Ive been to ZIMRA meeting on the implementation of the excise levy. It also doesnt apply to voice services but to data as well, all telecommunications.
that was to just ease operators from the original effect of the levy – to give them “break” as it were co vanga vachema from the heavy burden of the levy. but levy iya was neva passed on to consumers kana.
It was only operationalised in January 2016. The first port of call for your ‘research’ should have been ZIMRA, POTRAZ or the Operators themselves. Sympathy should be for yourself, the consumer, not so much the operators, they MAY be affected indirectly through reduced traffic (if that happens)
Okay so are you saying that between Sept 2014 when the 5% was ordered and Jan 2016 when that 1c increase was effected, the 5% excise duty was not being paid? If the January increase was indeed extending the cost to the consumer so as to cover that, who had been paying it in the period before that increase?
Does that also mean that data and SMS are essentially excise duty free?
The MNOs always pass on costs to consumers, however way you think of it. Don’t think the likes of Masiyiwa are donating the 5% from their pockets.
Nice one tecchzim.co.zw….. How come the author is so quiet… Or was this copied and pasted from the what’s app spam mentioned in another article…. On a serious not your reporting has declined to atrocious levels…. Can we have a follow up article cause I cannot fathom the mno shielding the consumer…. These are profit making companies