Gangi Longa
JF-Expert Member
- Feb 5, 2010
- 275
- 135
28th February 10
Tanzania`s phone taxes highest in East Africa
Polycarp Machira
Tanzania has the highest voice phone tariff on average compared to its neighbours, a study by the Tanzania Communication Regulatory Authority (TCRA), has shown.
The Tanzania's telecommunication sector tax package in fiscal year 2007/2008 included value added tax on mobile and fixed line, airtime at 20 percent, excise duty on the mobile phone services at 10 percent, bringing the total nominal tax to 30 percent .
Tanzania has been imposing higher rates of tax at an average of 28 percent over the period while Kenya and Uganda has been charging 26 percent.
According to TCRA report there are only 16 countries in the world that impose excise duty on usage of telecommunication services and only seven countries in Africa including Tanzania, Kenya and Uganda have imposed the tax.
By 2007 Uganda had only 6 percent penetration levels, which was the lowest in the region, while Kenya had a penetration rate of 15 percent and Tanzania 11 percent. In 2008, Tanzania had the highest tariff of Sh322 compared to Uganda and Kenya that had equivalence of Sh302 and Sh210 respectively.
"The 30 percent tax on services is certainly very high by any standard and this ranks Tanzania among countries with the highest taxes on mobile phone usage internationally," says the report.
A close examination of the relationship between the tariffs for off Net (different network) Mobile and off Net Fixed calls reveals abnormal phenomenon for Tanzania.
While in Kenya and Uganda off Net Fixed calls are cheaper than off Net mobile calls, in Tanzania the opposite is the case. Off Net Fixed calls are more expensive than off Net mobile calls.
The report shows that Kenya had been very expensive compared to Tanzania and Uganda in tariff on off Net Fixed calls for the period between 2002 and 2007 when it dropped sharply from Sh549 in 2007 to Sh273 in 2008.
It indicates that Uganda remained cheaper than her counterparts for the whole period while Tanzania changed to be the most expensive in 2008 as the charge rose to Sh491 from Sh 431 in 2007.
Looking at the amount on tariffs for calls in East Africa, Kenya remained most expensive from 2002 to 2006, followed by Tanzania. Uganda offered the cheapest rates.
Tariff in Kenya continued to fall drastically from Sh1,177 in 2002 to Sh728 per minute in 2008, presenting a drop of 38 percent. Tanzania tariffs declined steadily from Sh704 in 2002 top Sh 447 per minute in 2008.
Uganda was cheapest from 2002 to 2006, albeit of the gradual increase from Sh340 in 2002 to Sh470 in 2008. By the end of 2008 Kenya was still far expensive compared to Tanzania and Uganda by Sh 251 and Sh 258 per minute respectively.
The country's mobile telephone industry now accounts for five per cent of mobile phone subscribers in sub-Saharan Africa.
The 2009 International Telecommunications Union (ITU) report says Tanzania has the fourth highest number of subscribers, after Nigeria, South Africa and Kenya that respectively account for 26 per cent, 19 per cent and 7 per cent of mobile cellular subscriptions in the region.
For the past eight years, mobile phone subscribers have increased from less than 300,000 to over 14.09 million, translating to 25 per cent penetration. Neighbouring Kenya had 17.4 million mobile phone subscribers by end of June last year, translating to 45.7 per cent penetration.
The trend for international tariff shows that there was a rise and fall in the first three years for Kenya and Tanzania after, which a sudden decrease of tariff was experienced.
In Tanzania there was a sudden decrease in 2005 from Sh 2,080 to Sh 707 in 2006, which gradually decreased to Sh 660 in 2008.
In Kenya the drop started in 2006 from Sh 2,257 to Sh 1,013 in 2008. Uganda gradually moved up from Sh 450 in 2002 to Sh 699 in 2007 after, which it went down to Sh 511 in 2008
The report says in order to revitalize the telecommunications sector and enhance its growth a tax reduction of some sort will have to be considered otherwise telecommunications will remain the luxury of the rich only.
GUARDIAN ON SUNDAY
http://www.ippmedia.com/frontend/functions/print_article.php?l=13977
Tanzania`s phone taxes highest in East Africa
Polycarp Machira
Tanzania has the highest voice phone tariff on average compared to its neighbours, a study by the Tanzania Communication Regulatory Authority (TCRA), has shown.
The Tanzania's telecommunication sector tax package in fiscal year 2007/2008 included value added tax on mobile and fixed line, airtime at 20 percent, excise duty on the mobile phone services at 10 percent, bringing the total nominal tax to 30 percent .
Tanzania has been imposing higher rates of tax at an average of 28 percent over the period while Kenya and Uganda has been charging 26 percent.
According to TCRA report there are only 16 countries in the world that impose excise duty on usage of telecommunication services and only seven countries in Africa including Tanzania, Kenya and Uganda have imposed the tax.
By 2007 Uganda had only 6 percent penetration levels, which was the lowest in the region, while Kenya had a penetration rate of 15 percent and Tanzania 11 percent. In 2008, Tanzania had the highest tariff of Sh322 compared to Uganda and Kenya that had equivalence of Sh302 and Sh210 respectively.
"The 30 percent tax on services is certainly very high by any standard and this ranks Tanzania among countries with the highest taxes on mobile phone usage internationally," says the report.
A close examination of the relationship between the tariffs for off Net (different network) Mobile and off Net Fixed calls reveals abnormal phenomenon for Tanzania.
While in Kenya and Uganda off Net Fixed calls are cheaper than off Net mobile calls, in Tanzania the opposite is the case. Off Net Fixed calls are more expensive than off Net mobile calls.
The report shows that Kenya had been very expensive compared to Tanzania and Uganda in tariff on off Net Fixed calls for the period between 2002 and 2007 when it dropped sharply from Sh549 in 2007 to Sh273 in 2008.
It indicates that Uganda remained cheaper than her counterparts for the whole period while Tanzania changed to be the most expensive in 2008 as the charge rose to Sh491 from Sh 431 in 2007.
Looking at the amount on tariffs for calls in East Africa, Kenya remained most expensive from 2002 to 2006, followed by Tanzania. Uganda offered the cheapest rates.
Tariff in Kenya continued to fall drastically from Sh1,177 in 2002 to Sh728 per minute in 2008, presenting a drop of 38 percent. Tanzania tariffs declined steadily from Sh704 in 2002 top Sh 447 per minute in 2008.
Uganda was cheapest from 2002 to 2006, albeit of the gradual increase from Sh340 in 2002 to Sh470 in 2008. By the end of 2008 Kenya was still far expensive compared to Tanzania and Uganda by Sh 251 and Sh 258 per minute respectively.
The country's mobile telephone industry now accounts for five per cent of mobile phone subscribers in sub-Saharan Africa.
The 2009 International Telecommunications Union (ITU) report says Tanzania has the fourth highest number of subscribers, after Nigeria, South Africa and Kenya that respectively account for 26 per cent, 19 per cent and 7 per cent of mobile cellular subscriptions in the region.
For the past eight years, mobile phone subscribers have increased from less than 300,000 to over 14.09 million, translating to 25 per cent penetration. Neighbouring Kenya had 17.4 million mobile phone subscribers by end of June last year, translating to 45.7 per cent penetration.
The trend for international tariff shows that there was a rise and fall in the first three years for Kenya and Tanzania after, which a sudden decrease of tariff was experienced.
In Tanzania there was a sudden decrease in 2005 from Sh 2,080 to Sh 707 in 2006, which gradually decreased to Sh 660 in 2008.
In Kenya the drop started in 2006 from Sh 2,257 to Sh 1,013 in 2008. Uganda gradually moved up from Sh 450 in 2002 to Sh 699 in 2007 after, which it went down to Sh 511 in 2008
The report says in order to revitalize the telecommunications sector and enhance its growth a tax reduction of some sort will have to be considered otherwise telecommunications will remain the luxury of the rich only.
GUARDIAN ON SUNDAY
http://www.ippmedia.com/frontend/functions/print_article.php?l=13977
