Kelly Choos 
BY COMMERCIAL REPORTER
CALLS are growing for the government to revise the taxes and duties levied on the telecommunications sector to enable the sector to overcome the sustainability challenges it faces.
It comes after the parliamentary ICT portfolio committee, which visited Econet Wireless’ facilities in Harare this week, learned of the issue.
Zimbabwe’s telecommunications industry has been affected by high operating costs resulting from high input costs, most of which are denominated in foreign currencies.
The country is grappling with severe currency shortages, rising inflation, an erratic and inadequate power supply, and weak aggregate demand.
Warren Park MP Shakespeare Hamauswa, a member of the ICT portfolio committee, asked why telecommunications companies do not get tax breaks or incentives when importing equipment and accessories.
Econet deputy managing director Roy Chimanikire said the company continued to engage authorities.
“The industry’s tax burden is quite high, and this is an area in which we hope commitments such as these can give rise to scrutiny by policymakers.
“For example, we pay 5% health tax, 15% value added tax, 25% corporate tax, 3% universal service charge, 2% IMT tax and this exceeds the $ 137 million we (Econet) paid. the renewal of our license a few years ago, â€said Chimanikire.
The industry is also asking for a reduction, or removal of fees, for mobile devices as well as the 5% tax on infrastructure rental and data purchase, which it says results in double taxation.
Chimanikire said the cost structure of the local industry was higher than that of operators in the region due to the particular challenges Zimbabwe faces.
“For example, Mascom in Botswana probably spends a lot less on diesel to power the back-up generators on its grid than we do. The same also applies to telecom players in other markets who do not have to face most of the operational challenges we face here in Zimbabwe, â€he said.
The committee’s Econet tour came at a time when calls for the government to reduce multiple taxes levied on the telecommunications industry to improve operational viability and new investments have recently increased.
Earlier this week, Angeline Vere, representative of the Zimbabwe Telecommunications Operators Association, who is also CEO of Telecel Zimbabwe, told a workshop of the Zimbabwe Posts and Telecommunications Regulatory Authority that the government needed to reduce taxes in the sector.
“We also ask the regulator to discuss with the Ministry of Finance and all other stakeholders the reduction of over-taxation of the industry,” she said.
In its latest annual report, Econet said it paid a total of $ 12.2 billion in taxes in the fiscal year ending February 2021, a third of its total revenue and more than 14 times its net profit. .
Chimanikire noted that smartphone penetration in Zimbabwe was very low, at 52%, compared to around 90% for South Africa and 80% for Kenya.
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