Malawi pressed to scrap per-gigabyte internet tax, SMS

Malawi government is being pressed to scrap a planned tax on internet data traffic and and phone text messages (SMS).sms tax

Gondwe: SMS tax review

Gondwe: SMS tax review

The opposition and Civil Society Organisations (CSOs) asked government to drop its plans, warning that increasing the cost of web usage would be retrogressive for the developing nation.

Minister of Information Kondwani Nankhumwa has also reportedly cautioned Finance Minister Goodall Gondwe, who announced the new tax measure in his budget statement, at that internet levy would negatively defeat the drive of making telecommunications services affordable.

In a letter addressed to Gondwe dated 28 May 2015 that Nyasa Times has seen, Nankhumwa fears the newly introduced 10 percent excise duty on text messaging and internet data would largely affect poor Malawians.

Nankhumwa in the letter said in a sector which already has a number of taxes, telecommunications operators were likely to transfer the imposed taxes on the provision of the services to the end users.

“Analytical research demonstrates that the telecommunications/ICT sector tax revenues play an important role in national public services. This role must be weighed against potentially adverse effects that the taxation can bring to the growth of the sector, broadband and penetration and the country’s economic growth,” reads the letter.

The minister said the proposed taxes on usage and consumption taxes would have a negative impact on the poor Malawians as subscribers would have to pay for the same access charge as the better off Malawians who would also has to pay more for usage on the same services.

Nankhumwa tells Gondwe; “If no taxes are imposed, the net effect from the increased volumes (assuming a 10 percent growth subscriber base and volume of data similar to 2014 rates at the same tariffs prevailing currently) will be compensated by an income tax and the existing consumption rates at the current prevailing rates

“The spill over effect to other sectors that rely on telecommunication/ICT services for their productivity may also affect potential income in the long run.”

Meanwhile, the Malawi Revenue Authority (MRA) has since written operators who increased the tariffs to suspend the increase, saying the new tax is supposed to be implemented by July 1 2015 after all necessary bills are passed (as they are or after some amendments) in the National Assembly.

Malawians pay the highest tariffs to access communication services in the region, according to the International Telecommunications Union (ITU) December 2014 report.

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22 thoughts on “Malawi pressed to scrap per-gigabyte internet tax, SMS”

  1. Chimutu says:

    Where is MACRA and PPPC? Why don’t you guys say something?

  2. katakwe says:

    This tax is retrogressive to say the least,,,,government must look for othet avenues of broadening its tax base that will not exploit the poor

  3. vilimumu says:

    They claim that they consult b4 presenting their budget, does this truely match with what they say? My Judas Escalliot, Goodal Gondwe. That’s betrayal. If tired, go and rest back at home kuNtchenachena kura honourably, better and able guys are just out there who can perform in line to the needs of this country; it’s high time you accepted that you are in the edge of time. STOP TO BE SELFISH AND STEP DOWN you enemies of MALAWI.

  4. Ade says:

    IS THIS WHAT THEY CALL TRIVIA?

  5. Ade says:

    WHY ARE YOU SURPRISED ?? PRIME MINSTER RESIGNED. EVEN THE VP CHILIMA WHO WAS A BIG BOSS AT AIRTEL DID NOT ADVISE. THE TRUE THOUGH IS THAT THE GOVERNMENT KNEW ALL THIS. THEY ARE JUST RESPONDING TO CRITICISM.

  6. Lutepo says:

    There are some of things before you tell citizens, you really have to think twice, because to say the truth, increasing tax on ICT/telecommunications services is just the same as saying ‘we don’t want to grow’ because you cannot say you are doing business if IT service is not part of your product selling or service delivery. All the 7 Ps of the marketing mixes require the use of IT for easy playing around with business. Ranging from ‘Products’ design, ‘Place’ JIT deliveries, ‘Promotion’ communication campaigns, ‘Prices’ retrieving product’s prices in shops also, ‘People’ easy delivery of services, ‘Process’ the processes themselves, and ‘Physical evidences’ how to make the intangible services tangible also requires that on delivering a service(s) you have to be in time, this only means that IT/telecommunication services have formed part and parcel of businesses today. Where in this world can a country instead of lowering prices of these services raise instead, thus ‘killing’ development . Much as we know that in any country government of the day affects the way business is run, this includes; politically, economically, socially, technologically, in education, legally, environmentally and what have you, but any government of the day has to consider which areas are crucial to the development of the country. You cannot raise tax or impose tax on ICT in these days when all our neighbors are working on reducing costs of these facilities, don’t you know that we are doing the opposite? Think about these things and next time don’t bring something in the parliament before thinking over it or coming together and discussing before bringing to the public. Are you BBC(born before computers)? For u not to be able to recognize the importance that these services towards development of a country?. Please some of the things you have to learn from the late economic engineer, the late Bingu Wa Mnthalika, that man was really a visionary leader because he new what he was doing. ‘Teams don’t succeed because they have best individual players but because of synergy’, ‘ together we can make it’ Late President of the Republic of Malawi Bingu Wa Mnthalika. DPP you have to start working as a team, so others must follow……….please

  7. Dwambazi says:

    What is going on in this administration the right does not talk to the left???? Do you ever have cabinet meetings? Who is making decisions in this administration???? Itcomes across as being a very chaotic/disorganized . Nankhumwa advising Gondwe???? Where are the economic advisors??? Where is Mathanyula in all this mess????

  8. matutu says:

    The outcry,even from a minister, only shows a me know it all decision making & an archaic piece of work. Correct were there any consultations?

  9. kazeze says:

    Sad indeed that the budget is developed by one department/ministry, it is a shame.

  10. Ade says:

    #1Did you have to call Goodall ugly? Learn to attack ideas and policies not people. You can not even identify yourself. Shame on you and all those who think like you.

  11. Milambo says:

    Signs of a confused government.

  12. enuf said says:

    Are the Asians to blame for this too?

    U guys r more black than u look
    Black in the brains!

    It’s not rocket science

    It’s so obvious every government computer and service in general is connected to Internet which is online, using (data)

    So almost everything and service will go up which is related to it

    U dint think of that?

    Dumb dumb dumb

  13. R K says:

    Okhaokha kumalimbana koma onse ma Minister. Ndiye kuti Boma lagawikana pa wiri?.

  14. Baba wa boy says:

    The arguments raised are not exactly correct.

    Malawians are just used to having things without paying for them. To argue that the 10% tax will hurt the poor is not true. which poor people have a computer in their home? Which poor people have a smart phone, or even just a phone for that matter?

    There are two issues being mixed up here.
    1. Making IT accessible to as many people as possible and
    2. IT being expensive to use.

    It is the rich that are complaining about the tax, not the poor. If we argue the way we are now, then there should be no indirect tax whatsoever.

    All indirect tax is based on consumption so to argue that because this tax will be levied on the poor same as the rich, is a non starter, because all indirect taxes do, that is what VAT does.

    Find better arguments.

  15. P. M says:

    Stupid writing comenter number one (fearfactor)

  16. Maji Yaheni Gondwe says:

    Funnso kwa atumbuka: Ine ndine mtonga koma ndikufuna kudziwa kuti tsono pamenepa wanzeru ndi ndani Nankhumwa wachilomwe, kapena Gondwe wachitumbuka? Popeza apatu Nankhumwa wachita apply economics in a very sensible and forward focused manner.

    Finance minister uyu sakutithandiza tamuchiteni reshuffle.

  17. Obvious Phiri says:

    Kudos to Nankhumwa for at last being in the news for the right reasons. What was Goodall thinking?

    However this issue begs the question as to whether other ministers have any meaningful input into the budget process.

  18. zaoneka sizi says:

    this old guys brain cells are diminishing. no direction now. ku mamizi masiku anu anthu akumatha kumadziwitsana nsanga za moyo wasikundi siku, koma akakweza misonkho anthu akhala standed ,ndalama azigula zakudya and no communication with the world poti muuti mukweza while this old bastard is getting thousands and thousands kwaca for his fones allowances ,c’mon think b4 yu speak. pipop are scavenging to get a k100.00 for sms and here yu are with yo big eyes talkin nonsense

  19. Obvious Phiri says:

    Kudos to Nankhumwa for at last being in the news for the right reasons.

    However this issue begs the question as to whether other ministers have any input into the budget process.

  20. Alufeyo says:

    The attitude of Ministry of Finance officials led by G Gondwe makes it difficult for Makawi to develop. The problem with Gondwe is arrogance and exagerration of his intelligence. He thinks he knows more than everybody. He is very abusive and stupid. In addition why dont PSs discuss as a group and advise accordingly. Who says working in Finance is a sign of intelligence? Cabinet is built aroung collective responsibility and not individualisim.

  21. fearfactor says:

    THis means that the budget is only developed by this ugly G. Gondwe without discussing with fellow Cabinet Ministers. Nankhuma would not have written the letter if he was consulted at the cabinet level

Comments are closed.