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Consumer Unity and Trust Society urges Government to Reverse the 30 Ngwee Tax on Internet Calls

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The Consumer Unity and Trust Society (CUTS) has urged the Government to reconsider issuing the statutory instrument to introduce the 30 Ngwee a day tariff on internet phone calls and rather focus on ensuring improved service provision by the mobile phone operators.

Reacting to the 30 ngwee tarrif slapped on Internet calls by Cabinet, CUTS said that the decision by consumers to move to internet phone calls is rational consumer behavior prompted by past actions of both the Government and the mobile phone companies themselves, adding that Zambians have been receiving expensive but low-quality traditional phone services from the mobile phone companies.

CUTS further said that the Government’s decision to increase the cost of internet phone calls will severely affect low income consumers who had switched to this form of communication due to the high cost of regular phone calls.

“Communication is not a luxury service to the Zambian consumer but a necessary component of the day to day social and economic activities of citizens. It will also take Zambia backwards as the rest of the world is moving forward in the telecommunications sector. In addition, it will have implications on the cost of doing business because as other countries are able to benefit from more efficient and affordable costs of communication whereas Zambian business will be burdened by additional costs that will make them less competitive. This will have the most sever impacts on small and medium enterprises, ” read the statement

Below is the full satement

Press release
Tariff on Internet Phone Calls

At the 12th Cabinet Meeting held on the 13th of August 2018 at State House, chaired by His Excellency the President Mr. Edgar Chagwa Lungu, the issuance of a statutory instrument was approved to further the introduction of tariff charges on telecommunication service providers. Government noted an increase in the use of internet phone calls at the expense of traditional phone calls. It indicated that this development threatened the telecommunications industry and jobs in companies such as Zamtel, Airtel and MTN. In response, the Government has since introduced a 30 Ngwee a day tariff on internet phone calls.

Firstly, it is important to note that this shift in consumer preferences does not in any way threaten the telecommunications sector as the providers of both the traditional phone call services and internet phone call services are largely the same companies. This decision amounts to double-charging as consumers will still pay for data and now will be charged a 30 Ngwee a day tariff by the service providers. This decision is in violation of the consumers’ right to choose based on affordability.

The announcement comes as a surprise as it states that it is for the benefit of mobile phone companies however it was the mobile phone operators themselves, namely, Zamtel, Airtel and MTN, who all reduced the cost of data bundles by over 70 percent in at the end of 2017. This action increased the affordability of this service for consumers and as such played a major role in the increase of data users. This decision was welcomed by consumers.

The Consumer Unity and Trust Society (CUTS) is also particularly concerned that in the past two quarters ZICTA has fined all three mobile network operators for failing to meet Quality Service Guidelines. On June 26, 2018 the three telecommunications service providers, namely Airtel, MTN and Zamtel were fined a total of K12,6 million for the first quarter of 2018. This decision was on the back of a similar action taken by the regulator in the fourth quarter of 2017 to fine mobile network operators K3.1 million for failing to adhere to Quality of Service parameters. As such, Zambians have been receiving expensive but low-quality traditional phone services from these mobile phone companies.

The decision by consumers to move to internet phone calls is therefore rational consumer behavior prompted by past actions of both the Government and the mobile phone companies themselves.

The Government’s decision to increase the cost of internet phone calls will severely affect low income consumers who had switched to this form of communication due to the high cost of regular phone calls. Communication is not a luxury service to the Zambian consumer but a necessary component of the day to day social and economic activities of citizens. It will also take Zambia backwards as the rest of the world is moving forward in the telecommunications sector. In addition, it will have implications on the cost of doing business because as other countries are able to benefit from more efficient and affordable costs of communication whereas Zambian business will be burdened by additional costs that will make them less competitive. This will have the most sever impacts on small and medium enterprises.

The growing indispensability of mobile phone services today speaks to the importance that the Government should place on ensuring not only the accessibility, but also the affordability of mobile phone services.

CUTS urges the Government to reconsider issuing the statutory instrument to introduce the 30 Ngwee a day tariff on internet phone calls and rather focus on ensuring improved service provision by the mobile phone operators.

32 COMMENTS

  1. IndigoTyrol
    When did this government ever listen to the voice of reason? Or cared for its citizens? It is like talking to a brick wall. Except that brick walls do crack at times, but not this bunch of crooks. Brace yourselves citizens for tough times ahead.
    • Mushota
      Consumer Trust are USELESS There will be NO reversal The idea is PERFECT fine with the majority of Zambia I would like to see such societies to be SHUT for the goodness of zambians Thanks BB2014,2016
    • Thorn in the Flesh
      THE REAL VOICE OF REASONING COULD BE COMING FROM GOVERNMENT. =================================== *Let Government give us the figures. Fact check 1- How many Zambian Citizens are employed by the 3 network operators in total and full time which government has now realized it needs to save? Wild Guess is less than 1500 total for 3 networks. Extended part time (Ka waya waya) employees would be around 1500 total for 3 networks. MTN and Aitel have streamlined there business processes through a massive and aggressive outsourcer mechanism. So no real jobs to write home about. Saving 10,000 real jobs total for 3 networks would be the real deal. Let us leave it here. *Let the tariff opponents give us figures and answers Fact check 2- How many people and businesses will be affected or...
    • Thorn in the Flesh
      ... grounded by this tariff? I know that I will not because my internet connection is sometimes pathetic for the service. These Apps offer real free calls, do you agree that the cost of internet access should go up to cater for your free calls online? But how many people get online for no other reason but Voip calls? Do you realise that it is a real challenge to these companies somewhat inert managers? Lets leave this one here also.. Now people, real people sit down to resolve issues. I did not know that at least these real issues got the attention of someone.
    • Nubian Princess
      Time to wake up Zambia. Nothing is free, when you understand that and stop expecting handouts at every turn, true development will start.
    • FuManchu
      In Zambia we have a very dull opposition to which PF in it's full of bungling governance style provides lots of talking points yet the opposition fails lamentably to take advantage of highlighting! Indirectly people are being taxed and sucked out of their hard earned income yet services are on decline! Now government wants to make money from a service that isn't theirs! Tollgate fees are being collected making one think twice about making a journey be it business or local tourism atop fees that go into licensing a vehicle! Mind you speed traps without warning! Introducing some health legislation to levy the already squeezed population! All other watchers can do is 'ask' government to reconsider its actions!!
    • Jay Jay
      FuManchu - What can the dull opposition say when the couldn't bother to debate this when it was under their noses...they were busy enjoying themselves in Parliament Motel. Bring on a debate about MPs allowances you will see how they will study it!!
  2. independent
    $760million EURO payment is due soon.Turkey in economic crisis.Chinese has halted additional loans.Mr Edgar Lungu and PF ,you are killing our beloved country. Now you also want to take away the little that we have
  3. Alternative Facts Fake News S**thole Countries Social Mobility Chinese Zambia Police Reservists Corruption scandals: Ambulances Fire Trucks Mukula Trees Ndola-Lusaka Rd Malawi Maizegate Fuelgate Swaziland landgate Zesco Loans
    I agree 100%... mobile phone calls in Zambia are among the most expensive in the world. I was surprised when I last visited there with their so called "Talk time"... people don't even greet each other when call them, cutting to the chess and going straight to the message. I recall resorting to roaming because it was much cheaper than me buying so called "talk time" in Zambia which would vanish within seconds. I get surprised even whenever I call people want to quickly hang up on me because their brains are wired to think they are the ones who have called and their "talk time" would run out. The govt should be supporting competition to drive services and products prices lower. They don't like it because VoIP is cutting a slice from their humungous profits of more than 500%...
  4. Alternative Facts Fake News S**thole Countries Social Mobility Chinese Zambia Police Reservists Corruption scandals: Ambulances Fire Trucks Mukula Trees Ndola-Lusaka Rd Malawi Maizegate Fuelgate Swaziland landgate Zesco Loans
    ...continue reading... Mobile phones once equipment has been installed is cheaper to run (just maintenance and increase of bandwidth every now and then). It's about time these mobile service providers provided unlimited and uncapped phone calls and data for certain prices. As Dora and her multinational Internet giants like Google, Facebook, Microsoft, etc. not paying anything, here is a tip: if these companies are collecting revenue from Zambian users through ads, etc. you can ask them and negotiate with them to pay some form of tax. I know they are not registered in Zambia for tax purposes but you could still approach them to see if they can come to the party (long shot but worth trying). However, I doubt that they collect much revenue from Zambians who use their...
  5. Alternative Facts Fake News S**thole Countries Social Mobility Chinese Zambia Police Reservists Corruption scandals: Ambulances Fire Trucks Mukula Trees Ndola-Lusaka Rd Malawi Maizegate Fuelgate Swaziland landgate Zesco Loans
    ...continue reading... However, I doubt that they collect much revenue from Zambians who use their platforms. Approach them and try to engage them and do business with them. Again FYI Internet people are using is bought from the same mobile phone service providers.
  6. Spuds
    Where do these numpties in Cabinet think we buy our bundles for internet calls in the first place? I know "Hon" Ministers get their bundles for free, but the rest of us buy them from telecom companies. Since the telecom company sells the bundle, if there is something wrong with the pricing, let them try to charge more. With competition, efficient providers may not need to charge more and that is how consumers win, not by allowing providers to hide behind a protective tax. Not to mention, government already taxes the sale of bundles. Now they want to tax again for the sake of protecting outdated and high cost technology? Please, give Zambia a break!
  7. Spaka like lilo
    LT.......every other media is running the news ..... RATSA to reregister all vehicles in Zambia at K500 each Why are you not catching up ?
    • Spaka like lilo
      LT we want to expose lungus corruption with the lebanses of lamise who will be making billions for Lebanon out of Zambian drivers.....
    • Spaka like lilo
      And LT since you are so up to date with the good works of PF and statehouse , when and if you do run the above story can you get clarification of what the lebanses of lamise bring to this deal , what is the name of the formed company that includes lamise , who are the share holders .....we will expose you and lungu...
  8. CHISHIMBA M
    Our friends in South Africa are taking their presidents to task and answer for all the crimes they are doing while still in power, what are we Zambians waiting for??? The only solution here is to take Lungu to answer for all the decisions he is making now, let him be on the conference and let people ask him questions directly and he should give us answers if he is doing the right thing or not. otherwise let him face all the corruption charges now, its no secret that something is very wrong with PF Government. Even a small child is surprised at how Lungu is making and basing his decisions from??
    • Spaka like lilo
      Lungu knows from his days as a lawyer that the best defence for a theif is to not answer any questions.......lungu can never gave a free for all press conference.
  9. Street Kid
    This government is trying to create jobs... understood. But they don't get the point that... it takes money to employ. If you drain the employer, theres no employment. If theres no employment, theres no business. If theres no business, theres not enough in taxes. You will then squeeze the employer, furthering your failing chain reaction. Get it?? Ask any expat, life in Zambia is already expensive. And yet we struggle to pay our debts... Why?? The world has created more billionaires in places where the cost of internet is negligible... we are talking about legit billionaires.
  10. Chitutuma
    Indeed service provision by the existing providers is at best atrocious, at worst quite sickening. Mention Zamtel, for instance, always sick, the other two lethargic at best of times. So why consider taxing anybody for extremely shoddy services rendered by such substandard companies?
  11. mbaluso
    These taxes are a cause to worry.We are in for a big problem.These taxes are not progressive other than being regressive.A nation that milk it citizenry to the last dime is not worth praising.Toll gates,car park fees,vat,maintenance charges on your money once its kept in bank,withdraw charges,excise duty,the soon to be introduced borehole fee,people will even be taxed for sleeping with their wives.This nation is a big shame. This is daylight robbery.Peoples' disposable income is very minimal.And a gullible person tells the citizenry to invest their income.It is a mockery of the worst kind.Government is creating poverty through these taxes which are only benefiting a few crooked individuals. A retiree has nothing to show for except debilitating poverty.
  12. Mutulang'oma
    If this was an essay to argue against the introduction of tariff charges on internet calls, CUTS can get 3/10. There's no meat in their presentation other than being rational. They are simply saying 'we don't want,' why don'tyou want? 'We just don't want!'
  13. Spaka like lilo
    The people don't understand that PF were overinflating road contracts for themselves with the dream that the infrastructure will pay for its self when investores come tripping over them selves to invest in Zambia......thus far there have been no notable investores to write home about......things are not adding up for lungu with the soon due repayments. The tax paying workforce is not big enough. So now is to tax chipantepante... The agony is , potential investores look at available disposable income of the locals....only to find the locals are being taxed mercilessly and have little disposable income....
    • MahalfYatu
      Overinflating road contracts plus so many tripes with nothing to show. If me and you made so many trips, failed to account for the time and other resources wasted we would be shown the door sooner than later.
  14. shu shu shu
    CUTS thanks for appointing yourself to speak on behalf of Zambians. Now suggest other ways in which government can raise money to re-invest in the communication industry while protecting local jobs. Access to the media should not be allowed for half wilted social scientists
  15. ANYOKO
    WHAT IS 30NGWEE PIPO COMPARED TO EUROBOND THAT WE NEED TO PAY BACK . LETS SUPPORT ECL AND MAKE AS MANY CALLS AS POSSIBLE TO ASSIST GOVERNMENT PAY NKHONGOLE.
  16. loud and smart.
    Tighten your belts folks. More levies and taxes coming! Bore hole levy, internet/calling levy, rent tax, more toll levies..../not forgetting the Nkongole that some civil servants/pvt employees keep getting for consumption not investment. All this is due to a lack of planning as a nation. As every prudent business person knows, loans/nkongole are part of life. Thing is: one must have a plan to not only invest but to also repay. The Chinese are not giving more loans, IMF refused bail out, Turkey is in.....
  17. Lobyolo
    If this is not reversed, I would suggest the gov create a holding company to be collecting these revenues and in turn create jobs. It's a very bad idea giving the money collected to service providers who already overcharge consumers for data.

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