#MondayBlues: Gvt Taxation Driving Internet Costs.

The ministry of finance’s appetite to continuously milk the telecommunications sector is the main reason why access to information and communication will remain high in Zimbabwe.

We have complained too often about access to internet costs ,which ordinarily, Zimbabwe tops the list of most expensive nations, except on one day promotions, compared to other regional players.

By Sting.

While its so easy for the layman in the streets to point all fingers to Internet service providers and the regulator, it is a much less informed position when one tries to understand the true nature of the problem.

The ministry of finance, has continuously squeezed the ICT sector, in a move which will drive costs high to the operators, who like always will simply extend them to the subscriber.

Mobile Network Operators under the ministry of ICTPS  are charged  a whooping $137.5 million as operating licence fees, with Telecel and NetOne heavily negotiating on terms of payment.

The information communication sector is already heavily taxed, with a plethora of various taxes, which any other sector is not facing and another newly introduced 5% will burden the sector.

The Minister of finance, Patrick Chinamasa proposed a mobile money charge across all the networks, a levy which has seen all mobile transactions carrying an extra cost of US$0.05 irregardless of the amount.

The government also proposed a $1 charge to all airtime vendors, though the feasibility ofthe matter is still yet to see the daylight.

Overly the Zimbabwe government separately  introduced 70% dip in returns caused by 5 percent excise duty on airtime sales, a 25 percent duty on handsets and ICT products and a 5 cents levy per transaction on mobile money transfers, compounded by the 35 percent voice tariff reduction.

 

Besides all these taxes, the ICT sector used to be cushioned in a comfort zone where they charged a maximum of 23centsperminute,and these tariffs were slashed by the Ministry of ICT, much joy to subscribers who could not afford them anymore.

As the main revenue streams for mobile networks were drastically reduced, this has proven to be a major headache for operators who traditionally had voice as their major revenue earner.

 

This however, does not at any point justify overpricing or extending all these costs to the consumer, who is already struggling to meet with basic day to day needs.

 

The point is squeezing the ICT sector continuously is tantamount to killing the goose that lays the golden egg.

 

This is the same sector that government last election used to fund the national election and continuously , the sector has been a major contributor to the fiscus

Through taxes amongst the few thriving national coffers.

Sense will also have to knock to authorities, that ultimately telecoms sector is a business which needs an enabling environment to allow it to fully function and continues to become profitable as a business.

 

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