DRC: GSMA urges reform of mobile sector taxation

The GSMA has called on the government of the Democratic Republic of Congo (DRC) to review taxation imposed within the country’s mobile sector in order to secure socio-economic benefits.

According to the organisation’s report Reforming mobile sector taxation in the Democratic Republic of the Congo (DRC): Enabling economic growth through a supportive tax system, the implementation of tax reforms would benefit the broader economy and the government’s fiscal position, while expanding mobile adoption.

Between 2007 and 2017, the number of mobile subscribers in the DRC increased from 4.9 million to 29.3 million in 2017, at an annual average growth rate of 20%, with unique subscriber penetration increasing from 8.2 to 35.5% over the same period.

The mobile sector generated US$1.1 billion in economic value in 2017.

The GSMA recommended a reduction in excise duty imposed on mobile services from 10 to 3% to make mobile services more affordable and increase service usage.

“Mobile adoption in the DRC would increase by 2.8 million subscribers by 2023, equivalent to 3.6 million new connections, and mobile data usage would grow by 11.6 percent. This would increase annual investment of operators by US$1.2 million per annum; and GDP would increase by US$276 million by 2023; and Tax receipts would increase by approximately US$21 million annually by 2023,” reads an excerpt from the report.

It added that reducing the numbering tax from US$0.45 per number to US$0.225 per number would increase mobile adoption in the DRC by 800,000 subscribers by 2023, equivalent to 1 million new connections, and mobile data usage would grow by 3.2%.

“Tax receipts would increase by approximately $6 million annually by 2023,” GSMA stated.

John Giusti, GSMA’s Chief Regulatory Officer said, “Currently the tax burden on the mobile sector is constraining growth in mobile penetration, particularly for low income citizens. Our report highlights the need for mobile sector taxation that achieves a better balance between revenue maximisation, economic growth and social development.”

Source:IT web Africa