Zim government introduces 5% tax on mobile airtime

Posted by Read 11 Comments

airtimeAn announcement made today by Zimbabwean minister of Finance, Patrick Chinamasa, says the government will, from 15 September onwards now charge mobile operators 5% excise duty tax on airtime. Effectively this likely increase the cost of making a phone call in Zimbabwe.

The announcement was made as part of the government’s 2014 Mid-Year Fiscal Policy Review
Statement (which you can download here). The move, according to the minister, is aimed at raising funds for government expenditure. It looks as if when the government can’t fund running the country, telecoms is the target for sourcing revenue.

Ideally, the mobile operators will pass this cost on to the subscribers, who will be faced with the choice of allocating more to monthly communication expenditure, or resort more to cheaper ways of communicating, like WhatsApp.

Says the policy:

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498. Mr Speaker Sir, as already alluded to, Government faces a challenge to raise additional revenue to finance non-discretionary expenditures.
499. I, therefore, propose to levy excise duty of 5% on air time for voice and data, with effect from 15 September 2014.

For those not in the know about what Excise Duty is, ZIMRA explainsit is tax charged or levied by the Government on certain domestic production of prescribed goods and services? It is an indirect tax, or a transaction based tax, meaning that a liability arises when something occurs (usually production, or the sale of a finished good or service), and not related to profitability of the transaction.

Government has also now started levying 25% customs duty on mobile phones which doubles the impact.

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11 Comments

  1. Anonymous says:

    oooooh my God so literally , it means if someone buys airtime for a dollar ($1) they will get $0.95 credited to their mobile number, eeiiish things are not right

  2. M3YA says:

    Going to the dogs!

  3. collen says:

    pakaipa pakaipa mheni

  4. jaga says:

    They killed parastatals and they are now after efficiently run companies, the most parasitic gvt africa has ever known

  5. Anonymous says:

    its dog eat dog situation

  6. Farai says:

    Mobile money tax, airtime tax, data tax…contract deals next to be taxed?

  7. Arsene Venger says:

    Telecoms companies will be next to collapse. Wonder if Net One & TELONE will also pay.

  8. After one of your earlier articles about iWay vs Telone VSAT licensing differences I wonder if this is another way the government is planning on making it harder for competition while being funded by the competition. Some serious breaks on revenue streams about to start happening, and how well have ZOL launched their new fibre packages? You will probably team up with your neighbours to reduce the cost and save money on data.

    At the end of the the black market will spring back into action for your devices it just means ZIMRA will get less VAT remitances in that sector.

  9. Anonymous says:

    Nyika iya maichemerai honai zvayava

  10. rasu says:

    My Zimbabbwe eish pakaoma,some countries are fighting to reduce communication costs for the bettermant of lives to there pple yet ours don’t want us to make a call at all,thus killing us and going back to writing letters we wll never catch up with other countries

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