Chad: Turnover tax for telecom companies went from 7% to 9%

Chad: Turnover tax for telecom companies went from 7% to 9%

The mobile operators operating on the Chadian telecom market have seen the annual financial fee it paid to the government, from 7% to 9%. The measure became effective on 1 st January 2018. This further increase in tax revenues is the second of its kind operated by the state in the space of five years. Indeed, the tax had already been increased from 4% to 7% between 2014 and 2016.

In sum, it is an additional pressure on the finances of telecom companies that could affect the cost of services offered to the public. In its report entitled “Digital Inclusion and Taxation in the Mobile Sector in Chad”, published in 2016, the World Association of Mobile Operators (GSMA) denounced the overtaxation of the Chadian telecom market. The organization counted more than 25 fees for mobile services and telecom operators.

GSMA, aware of the indispensability of telecom taxes to finance public spending in Chad after the fall in revenue from oil activities, however, questioned the government on a necessary tax reform of the sector. For her, a change of method would have a positive impact on the investment of the telecom companies, the improvement of the business environment, the improvement of the access for the populations and the transformation of the sector in pillar of the economy in the long term.

The new amount of the levy collected on the turnover of mobile operators, is distributed among several state agencies. The Regulatory Agency for Electronic Communications and Posts (Arcep) which received 3.5% of the old amount will now receive 2.5%. The 2.5% ICT Development Agency will now receive 1.5%. The National School of ICT (Enastic) will receive 0.6%; 0.4% will go to security and 4% will go to the Treasury.

Source: Agence Ecofin



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