Business / Companies
5% airtime tax, government urged to re-think
01 Nov 2015 at 15:58hrs | Views
Telecommunications operators are engaging government for the removal of the five percent duty on airtime sales which they argue is putting pressure on the performance of the sector.
The five percent duty on airtime was effected on the 1st of October 2014, together with the 25 percent excise duty on handsets.
A meeting between the government and the telecommunications operators is scheduled to take place within the next two weeks.
According to the industry position paper signed by four dominant players, Econet Wireless, Telecel Zimbabwe, TelOne and NetOne, the excise duty has put pressure on operations and has affected the roll out of capital expenditure programmes.
The Ministry of ICTs, Postal and Courier Services has indicated readiness to discuss with the operators and to come up with an agreed paper which can be forwarded to treasury for considerations.
If the 25 percent duty on handsets is scrapped, it will result in more than US$20 million in sales on handsets and related devices, thereby increasing value added tax (VAT) collections by about US$5 million, argue the operators.
The engagement between government and the operators comes at a time the sector's contribution to the gross domestic product (GDP) is projected to decline from the 2011 level of 8,52 percent to 7,42 percent by December 2015.
The five percent duty on airtime was effected on the 1st of October 2014, together with the 25 percent excise duty on handsets.
A meeting between the government and the telecommunications operators is scheduled to take place within the next two weeks.
According to the industry position paper signed by four dominant players, Econet Wireless, Telecel Zimbabwe, TelOne and NetOne, the excise duty has put pressure on operations and has affected the roll out of capital expenditure programmes.
The Ministry of ICTs, Postal and Courier Services has indicated readiness to discuss with the operators and to come up with an agreed paper which can be forwarded to treasury for considerations.
If the 25 percent duty on handsets is scrapped, it will result in more than US$20 million in sales on handsets and related devices, thereby increasing value added tax (VAT) collections by about US$5 million, argue the operators.
The engagement between government and the operators comes at a time the sector's contribution to the gross domestic product (GDP) is projected to decline from the 2011 level of 8,52 percent to 7,42 percent by December 2015.
Source - zbc
