More Africa NewsZimbabwe: Tax burden too heavy say Zim telcos

November 19, 2021by myles0
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Zimbabwe telecommunication services companies have appealed to authorities to reduce or cut taxes and levies enforced on the industry amid continued economic pressure.

The country continues to battle with liquidity crunch, rising inflation, power outages, and low aggregate demand. Specifically, the telecommunications industry has been hard hit by high operational costs emanating from the unpredictable foreign currency exchange.

A member of the ICT portfolio committee Shakespeare Hamauswa said this week that a delegation had toured the Econet Wireless facilities to witness first-hand how challenges are affecting operations.

Following the tour, members of the parliament said it was imperative for the government to provide the telecommunication firms tax breaks or incentives when importing equipment and accessories.

Hamauswa said: “The industry’s tax was so high and a burden. The policymakers need to engage with the government to review the industry’s tax.”

Econet deputy executive officer, Roy Chimanikire said the company is paying 5% health levy, 15% VAT, 25% corporate tax, 3% universal service fee, and 2% IMT tax.

A few years ago, Econet paid US$137-million to renew its licence.

According to Econet’s latest annual results, the company paid a total of ZW$12.2-billion in taxes in the financial year ending February 2021- a third of its total revenue and more than 14 times its net profit.

The industry is being weighed down by taxes and has appealed for a reduction or removal of duty for mobile devices along with the 5% duty on infrastructure renting and data purchasing.

Chimanikire believes Zimbabwe’s cost structures for telecommunication companies are comparatively higher than other businesses.

Last week state-controlled newspaper, The Herald quoted Telecommunication Association representative and CEO of Telecel Angeline Vere as saying: “We’re also appealing to the regulator to discuss with the Ministry of Finance and all stakeholders the reduction of over-taxation of the industry.” 

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