The Centre for Trade Policy and Development Researcher has charged that the 30-Ngwee Internet Tax is Misguided and has since asked Government to reverse this decision.
On the 12th of August, 2018, the Zambian government held a cabinet meeting at which a collective decision was made to introduce a 30-ngwee per day tariff on internet calls with a view that the increase in internet calls threatens the telecommunications industry and jobs in companies such as Zamtel, Airtel and MTN.
Chief Government Spokesperson Dora Siliya stated in a follow up press statement that “a research showed that 80 percent of the citizens are using WhatApp, Skype and Viber to make phone calls.”
CTPD Researcher Mr. Bright Chizonde said this collective decision was misguided and government must consider reversing the decision.
only about 1.3 million citizens can make internet phone calls-which is about 8 percent of Zambia’s population
Mr. Chizonde said CTPD also considers the cited research and figures to be erroneous and very misleading.
According to the 2015 ZICTA ICT Survey report, about 51 percent of people aged above 10 years in Zambia are active users of mobile phones. Of this, less than 13.5 percent of the users have smart-phones. Furthermore, only 71 percent of the people with smart phones use the devices to access Over The Top (OTT) applications like WhatsApp, Viber, Facebook, Skype and Twitter for communication using instant messaging or voice calling. After doing the math, this means only about 1.3 million citizens can make internet phone calls-which is about 8 percent of Zambia’s population,” he said.
“The minimal number of people using this service can therefore not justify the Issuing of and SI seeking to impose a tariff on internet calling. The view that government would save jobs by doing this is simply a misunderstanding of how business and trade operates.”
He said Government should maintain its role of providing a conducive environment for business growth, and regulation of the sector should be done through ZICTA in order to protect the interest of the mobile phone users and the economy at large.
“Job creation and security in any sector is affected by a number of key economic factors such as the level of economic activity, profitability and technological changes which lead to constant structural changes in the sector.”
He added ,”Technological advances like internet calling should not be discouraged through taxation. Recently, we have observed an increase in banking innovations on the part of these same telecommunication companies such as the introduction of mobile money services. Such technological advances negatively affect the commercial banks but the banking sector has not complained. Should the government also introduce a tariff on mobile money services?” he asked.
“Should emails also be taxed because they reduce revenues of the postal service?”
He said CTPD is of the view that the 30-Ngwee tariff will only add to increasing the cost of communication and business in the country relative to its neighboring countries.
Mr Chizonde Warner that this will disadvantage Zambia by increasing the cost of doing business and may result in lower foreign investments in many other sectors.
“Government cannot start operating like a mobile provider in incentivizing users away from a particular service. If government wanted to get a share of what the companies get, an option would have included introducing a tax at source, not targeting an end user. Government’s role is to provide a conducive environment.”