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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Chimutu
Guest

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

Romeo Hastings Bandawe
Guest

Thumbs up Nankhumwa.

katakwe
Guest

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

vilimumu
Guest

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.

Ade
Guest

IS THIS WHAT THEY CALL TRIVIA?

Ade
Guest

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.

Lutepo
Guest
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… Read more »
Dwambazi
Guest

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????

matutu
Guest

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?

kazeze
Guest

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

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