Telcos express concern over multiple airtime taxation

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By Business Reporter

THE telecoms sector has expressed concern at the manner in which Zimbabwe Revenue Authority (ZIMRA) is collecting airtime tax and urged the agency to urgently look into the matter.

This came up at a ZIMRA-Telecoms sector breakfast meeting recently held in the capital.

A Telecel Zimbabwe staffer who identified himself Johannes Savieri pointed out that players were confused by the definition of ‘airtime’ being used by ZIMRA for tax purposes.

“Most players have been treated as non-compliant tax payers due to the confusion in the exact definition of the term tax.

“The word airtime is too broad; and this is causing challenges,” he said.

Another participant added; “It appears the tax is being collected from both the service providers, retailers and the users, thereby amounting to multiple taxation on one commodity.

“How is this being handled?”

A senior manager at ZIMRA’s Customs and Excise Division, Adrian Swarres, said that the authority would look into the issue.

“We have also come to realise that there is an issue in the definition of airtime and as a result we have engaged experts in the industry to look into the matter,” he said.

Postal and Telecommunications Regulatory Authority of Zimbabwe (Potraz) director general, Gift Machengete, recently urged increased collaboration between policymakers and operators towards further reduction of mobile and broadband service costs to achieve

“We believe sector-specific taxes should be reconsidered as the net effect of such taxes is imposing a penalty on consumers for using ICTs,” he said.

“There is, therefore, no doubt that the current tax regime on airtime is hurting consumers, in particular the bottom of the pyramid consumers.”

Government introduced the five percent tax on airtime in 2016 to help fund the public health sector.