Telecoms regulator, POTRAZ is taking the consumers’ side by calling the government to reconsider the 5% excise duty on airtime. The 5% excise duty was introduced in 2014 as part to raise funds for government expenditure but concurrently in increased the cost of airtime for consumers. POTRAZ general Director, Gift Machengete is saying that government should take time to review the tax as it was “imposing a penalty” on the average consumer. Speaking about the excise duty, POTRAZ general Director, Gift Machengete said;
….at policy level, we believe sector-specific taxes should be reconsidered as the net effect of such taxes is imposing a penalty on consumers for using ICTs……. There is, therefore, no doubt that the current tax regime on airtime is hurting consumers, in particular, the bottom of the pyramid consumers…..This surely calls for reconsideration and decisive action
The tax which is imposed across board fails to consider the different social and economic status of consumers. Consequently, hurting Zimbabwe’s low-income earners as they are having to overspend to consume mobile services.
The tax obviously takes advantage of the ‘price inelasticity’ of airtime (demand remains the same for a range of prices) to overcharge the consumers.
Although since 2014 the country has been sustaining a commendable increase of mobile subscribers regardless of the tax, the tax could be partly responsible for the high tariffs consumers are incurring.
I hope that POTRAZ will have it its own way in either getting the excise duty scrapped or reduced as it will give consumers a relief from the 5% airtime tax.