Outcry over Zimbabwe's proposed US$50 cellphone tax

GOVERNMENT has been urged to withdraw the proposed US$50 cellphone levy as it could create a digital divide, as handset dealers will simply pass on the expense to already constrained consumers.

Presenting the 2022 National Budget, Finance and Economic Development Minister Professor Mthuli Ncube proposed a levy of US$50 to be collected prior to registration of new cellular handsets by mobile network operators.

Prof Ncube argued that while imported cellular handsets attracted modest customs duty of 25 percent, there was evasion of customs duty as cellphones can be easily concealed.

"However, where duty would have been paid, the Zimbabwe Revenue Authority will provide a refund of the levy, within 30 days of receipt of payment from the mobile network operator," said Prof Ncube.

Some cellphone dealers said they were selling second-hand gadgets and it would be unfair for Government to introduce a flat tax.

The dealers said if the tax is introduced, cellphones will become too expensive for most people who can hardly afford second-hand handsets.

A dealer, Mr Nkosana Nkomo, who operates from Unity Village Flea Market, said if Government introduces the handset tax, they will pass the expense to consumers.

"We buy our cellphones mainly from South Africa so if there is going to be a US$50 tax on a cellphone, it means I will just add the same amount to consumers. Also, we need to understand how this tax will be levied because some of the cellphones that we are selling are not worth US$50," said Mr Nkomo.

Information Communication Technologies (ICTs) expert Mr Robert Ndlovu said Government should consider shelving the proposed tax as it will derail efforts that have been made in closing the digital divide.

"The introduction of the handset tax will have a direct and indirect effect in the quest to bridge the digital divide.

Increased mobile broadband coverage and lower prices for smartphones has been very crucial in delivery of ICT and digital services, for example, mobile banking, e-learning, messaging delivery of health alerts, among other services delivered via the mobile handset," said Mr Ndlovu.

He said following the advent of the Covid-19 pandemic, the need to embrace ICTs cannot be over emphasised.

Mr Ndlovu said Government also needs to be clear on how the policy will be implemented.

"Does it mean every time I buy a new phone then I must register my handset with my provider so that they update their database? How many handsets am I allowed to use per SIM card? For those who use internet telephony, how will the end users be forced to register their handsets with mobile operators when using Over The Top (OTT) apps such as Skype, WhatsApp, Telegram, and pure VoIP," he said.

Educationist and Zimbabwe Teachers' Association chief executive officer Dr Sifiso Ndlovu said if the tax is introduced, it will frustrate e-learning.

"Unless there is a dispensation that excludes education from that facility, then we are likely to see the widening gap between the urban and rural divide in accessing digital education. In essence, it will be a preventive strategy in education generally. It will stop access to education by learners, especially during critical times like the Covid-19 pandemic," said Dr Ndlovu.

He said there is also a need for clarity on the cellphones that will be levied.

Economist Mr Reginald Shoko said the proposed tax could have both a negative and a positive impact.
He said the consumer will suffer as the prices of cellphones will skyrocket, but if the tax is ringfenced for the development of ICTs infrastructure, in terms of lowering the cost of data then it is viable.

"If this handset tax is properly utilised and ringfenced, it is a welcome development. Its negative will be outplayed by its positive infrastructure development around it," said Mr Shoko.