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New tech taxes: are we killing the goose?

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Yesterday we heard of the new taxes on mobile phones and airtime credit introduced by government.

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It’s hardly surprising that less than flowery opinions have been shared by Zimbabweans who are now faced by the prospect of a significant price increase on devices and already expensive mobile communication services.

The fact is the waiver on duty for mobile handsets and computers has contributed to the huge uptake in mobile and internet services.

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An impressive mobile penetration rate and growing internet access mostly through mobile devices has helped in the huge uptake of add-on services like mobile money. It’s something that every startup always harps on when justifying any ambitious growth figures.

Unfortunately this impressive run is something that is now being used as justification for the introduction of taxes that will likely slow down or impede the sector’s growth.

Its very clear that the country’s leadership figured out that technology has such a consistent earning potential in the face of tough macro-economic conditions that it can and should play a bigger part in the ZIM ASSET equation.

Last year a tax was approved on network operators to fund the elections and the same mobile networks were asked to fork out $137.5 million each for license renewals. The milking didn’t stop there though.

At the beginning of this year a 5 cents charge was attached to every mobile money transfer. Then of course there’s the $1 a day state levy that airtime and street vendors (including the average Joe selling chargers and phone covers at Copa Cabana) have recently been slapped with.

How sustainable is this approach? Should mobile network operators and any other service in that spectrum always bear the grunt of an illiquid economy? Looking at the new taxes on mobile phone imports, what will happen to service providers and employers in this line of trade? Business will get tougher, something that doesn’t provide relief for everyone in the long term.

If technology is proving to be a shining beacon in a depressed economy then why not enable it rather than tax it? Instead of enacting policies that support tech growth and investment every fiscal season has meant a more creative of having tech services line the state coffers.

Isn’t it wiser to expand the opportunity rather than slowly and systematically kill the goose that has been laying the golden egg?

What other options do you think the Government should explore instead of raising taxes on anything tech and mobile communications related? 


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8 thoughts on “New tech taxes: are we killing the goose?

  1. Unfortunately thats how this Government thinks.

    Where there is growth or recovery is where there should be more taxes.

    Where people are spending money on is where there should be more taxes.

    How they think:
    1) Oh, people are importing so many cars… wait!…we can increase customs and get more from them

    2) Oh, we need forex in this country, why are our people spending THEIR money on cars, lets ban import of vehicles! Yes, then that forex will come to us. They will spend it on things that can be taxed, giving us more revenue. These people are sheep. They will spend that money on something that comes back to us now that they cant import cars

    3) Councils are making so much money creating revenue from water supply, I have an excellent idea, lets centralise water supply under one organisation, give it a cool name like ZINWA and have that revenue collection coming to us! Never mind that we dont have the capacity to maintain them or that it may bring about disease outbreaks in the future. We are the GHAVHUMENTY!

    4) Goods are too expensive, lets control them in Zim dollars and never mind the global exchange rate. Things will still be business as usual

    5) Why would we ever let the exchange rate be determined by market forces? We will fix the exchange rate because thats what we want. We are GHAVHUMENTY. Gono, do it

    6) We will beat this inflation from ZERO to HERO by adding more zeros and adding higher denomination. Sincerely,
    YOUR-WA GHAVHUNA,
    Gideon Gono
    P.S. Failure is not an option, and “you are all of you beneath me!” (to quote Loki the great: http://www.youtube.com/watch?v=nghPG-b7D8g)

    1. ‘GHAVHUMENTY!’, that’s a good one! But seriously though, I’m beginning to think the gov has a personal vendetta against me for staying in Zim.

  2. The Gvt thinks of money only. Growth? What growth? We pay toll fees and the roads in Iraq are in a better state than ours. R&D costs just went up. Availability of newer phones will diminish. Average Jack and Jill will not buy airtime as much nor use data also.

    In my opinion, the goose was admitted to see the vet when they started taxing mobile money. Now they are trying to carve it with a blunt rusty knife hoping to extract more “golden” tax (eggs) from it. The quacks will get louder and change to a um..shrill (can they shrill?) But who’s stopping the cutting?

    Poor goose…. 🙁

  3. Im interested much in the 5 cents added to airtime. What does this mean for me, end user. Will calls go up 5 cents or this is going to affect airtime vendors who were buying $0.91 and now maybe wholesale price will jump to 95C

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