Foreign satellite service providers to pay tax

The cash-strapped government has amended the Finance Bill to enable it to tax foreign satellite service providers such as Multichoice.

Parliament has acceded to the amendment of Section 14 of the Income Tax Act so that fees and charges that are paid to foreign satellite service providers are deemed as income sourced from Zimbabwe for the purposes of taxation.

During debate on the Finance Bill, some lawmakers had resisted the amendment on the basis that it was not enough to seek to tax foreign providers of broadcasting services in Zimbabwe.

Harare East Member of Parliament Tendai Biti had in fact proposed that the Act be amended so that the method of calculating income tax in Zimbabwe moves from residents to source.

It was, however, not the first time that government had advocated for the source-based approach.

In 2013, Parliament passed a new Income Tax Act which introduced, in a revolutionary manner, the method of calculating tax from residence to source.

While it sailed through both Houses, then president Robert Mugabe refused to put his signature to it.

Biti had also reasoned that thousands of Zimbabweans are watching and paying foreign suppliers of broadcasting services because of poor programming from the Zimbabwe Broadcasting Corporation (ZBC).

"The real issue is that we must attend to the issue of media reform.

Thirty-eight years after independence is not good enough that we have one broadcasting house called Zimbabwe Broadcasting Corporation.

"So, our people are paying Multichoice and DStv because we cannot watch the unpalatable, disgusting Zimbabwe Broadcasting Corporation.

"That is the real issue. There must be media reform. In this country there must be a liberalisation of the airwaves and this does not cost money. Unlike other reforms, introducing and liberalising the media airwaves does not cost money. It must happen now, today, namnhla," Biti said.

Dzivarasekwa lawmaker Edwin Mushoriwa had also backed Biti's call to open up the airwaves.

"I think the call and the reason why people in this country, each and every household - I think they are very few that watch ZBC and can probably do so during the news hour. The majority of the people do not do that.

"The clause here where the minister feels that money is going to Multichoice and other satellite broadcasting can easily be cured if this country would open the airwaves and we have more broadcasting, we will not be having this problem because most of the people will have a choice," Mushoriwa said.

Despite opposition from some MPs, Ncube won the backing of the majority of the lawmakers who endorsed the amendment.

In his argument, the Finance minister insisted that the clause was about the foreign service providers and not the domestic providers.

"I cannot believe that anyone is opposed to this very progressive clause about making sure that foreign service providers comply.  The issue about the domestic service provider is another issue. I rest my case and propose that the clause is adopted as is so that foreign service providers of this kind of content can be taxed accordingly and contribute to the fiscus in Zimbabwe," he said.

Media surveys suggest that the majority of Zimbabweans still rely on the State-controlled ZBC radio and television channels for news and information.

Although some Zimbabweans have access to Multichoice programming, many cannot afford the service.

The State has, in recent years, issued radio licences to entities connected to the ruling party and government in a bid to provide a veneer of plurality.

Zimbabwe, with its one national television station, lags behind the rest of the continent in broadcasting plurality, despite being the second African country - after Nigeria - to see the introduction of a television service in 1960.