GSMA admonishes African governments not to single out telecom industry for taxation

By Nana Appiah Acquaye, Accra, Ghana

The Head of GSMA Sub-Saharan Africa, Akinwale Goodluck, has reiterated calls on African governments to desist from imposing extra taxes on their telecom sectors.

According to him singling out the telecom industry for taxation has the potential of retarding the growth of the the sector.

Contributing to the theme ‘The Role of Regulation in Sustaining the Growth of Mobile Financial Service’ at the just ended second Mobile Money Stakeholders Forum held in Accra, Mr. Goodluck cited the example of Uganda and said burdening the telecom sector with taxations could siphon the industry.

In July, 2018 the Uganda government began implementing a new tax of 1 per cent on receiving money, making payment and withdrawals of money on all mobile money platforms. Following several protest from the public, the country’s parliament in October, approved a downward review of the new tax on mobile money tax from 1 per cent to 0.5 per cent.

Despite the 0.5 per cent downward adjustment, it was the country’s telecom industry that suffered the most and according to the Uganda Communication Commission, internet subscription declined by more than 2.5 million users and the value of mobile money transactions, also fell by 4.5 trillion Ugandan Shillings.

Unfortunately, other telecom sectors in countries including Kenya, Tanzania, Zambia and Zimbabwe have witnessed similar down turns after their governments tried imposing taxes on the sector.

Although the Ghanaian government,  has denied harboring any intention to impose additional taxes on the telecom sector, especially the mobile finance service ecosystem, other stakeholders and industry observers fear that, the government may use other cunning means to tax the system.

But the Head of GSMA for Sub Sahara Africa, wants African governments to see the telecom industry as a catalyst and enabler of every economy.

“I believe that because of the advantages of mobile money, the government should not actually be seeking to impose additional tax and making it less attractive than cash, it should be the other way round,” he said.

He further insisted that current benefits that are not extended to cash should be extended to mobile money, saying “if you look at the ripple effect of mobile money in any economy, the unimaginable i.e the cost of printing currency, the cost of distributing currency, security implication, all these go away. So to now put additional tax discourages people,” he said.

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