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Tim
This is interesting indeed. I wish it
gets into the ears of the finance people
Patrick Mwesigwa
Technical Manager
Uganda Communications Commission
12th Floor, Communications House, Plot 1, Colville Street
P. O. Box 7376, Kampala
Phone: +256 41 339004
Fax +256 41 348832
McTim <[EMAIL PROTECTED]>
Sent by: [EMAIL PROTECTED]
12/14/2005 07:34 PM
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Please respond to
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Subject
| [wsis2005] Interesting reading about
UG! |
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Subject: Taxation Policies Widening the Digital
Divide
Taxation Policies Widening the Digital Divide
The East African (Nairobi)
ANALYSIS
December 13, 2005
Posted to the web December 13, 2005
Kezio David Musoke
Nairobi
East Africa has the highest tax burden on the mobile telephone
industry in Africa.
Uganda, with about 1.3 million mobile handsets, is ranked second
after Turkey among the 50 countries in the world with the highest
taxation on mobile handsets and services. Tanzania is ranked sixth,
and Kenya ninth.
This information is contained in the Mobile Tax Report published by
Deloitte & Touche in August for the GSM Association (GSMA). GSMA is
a body that represents the interests of over 680 mobile operators in
210 countries worldwide by enhancing the value of mobile services
globally.
The report was presented to the International Telecommunication
Union - the UN body that governs and regulates international
standards for the world's telecom environment - in November at the
World Summit on the Information Society (WSIS) in Tunis, Tunisia,
where delegates said lowering of cost barriers such as the cost of
handsets, services and taxes will provide a sustainable pathway to
eliminating the digital divide.
Delegates attending the summit resolved that the International
Telecommunication Union should put pressure on developing economies
to revise their telecommunication policies create the right
environment for telecommunications to grow.
The Ugandan government has since July this year failed to finalise
and publish the new telecommunications policy; for the past five
years, the sector has been running a duopoly of national telecoms
operators Mobile Telephones Network (MTN) and the Uganda Telecom Ltd
(UTL).
According to the report, Brazil, Argentina, East Africa and other
African governments in the study - with the exception of Nigeria and
Angola - appear to apply high tax levies through a combination of
taxes on both the usage and the sale mobile phones.
The study says that the 10 markets with the highest taxes on mobile
telephony are Turkey, Uganda, Brazil, Syria, Zambia, Tanzania,
Argentina, Ecuador, Kenya and Ukraine.
Cited in the study are fixed taxes paid at the time of subscription
and tax charges paid after subscription by mobile telephone users.
Others are traditional sales, variable taxes levied on mobile
telephone use like value added tax and taxes due on the importation
and sale of mobile handsets.
"Closely following Turkey is Uganda with overall non-recoverable
taxes on importation of 27 per cent, a value added tax rate of 18
per cent and an excise rate of 12 per cent. All this leads to a tax
proportion of 29.9 per cent in the total annual cost of mobile
ownership," the report says.
During the 2004/05 budget reading, Uganda announced an increase in
mobile phone airtime (phone call credit) duties to 12 per cent from
10 per cent and a VAT increase to 18 per cent from 17 per cent, a
move it expected to generate Ush36 billion ($19.7 million) and
Ush5.2 billion ($2.9 million) respectively.
According to the report, Tanzania has a tax proportion of about 26
per cent while Kenya with about 4.4 million mobile handset owners
has a tax proportion of about 24 per cent in the total annual cost
of mobile ownership.
The report also says that, while the mobile phone is widely
recognised as an equivalent to fixed communications in terms of
providing connectivity, there are still significant differences in
some countries in the tax treatment of these two communication
mediums.
Turkey and Uganda are still cited as having the highest difference
between fixed and mobile tax rates. The 12 per cent excise duty in
Uganda is payable on mobile but not fixed telephony.
The report also points out Tanzania and the Democratic Republic of
Congo are the only countries in the region that still impose Customs
duty on imported mobile handsets. Tanzania's mobile handset tax has
been recorded as one of the highest, at well above 30 per cent
joining Cameroon, Mexico and Ghana.
In Tunis, Hamadoun Toure of the Telecommunication Development
Bureau, a body working under ITU, said that ITU through the UN is
petitioning developing countries to revise their tax policies under
their national ICTs policies in order to solve the "digital
dilemma," for their countries.
Governments must recognise that they have an important role in
creating the right environment for telecommunications to grow.
Policy factors including taxation may have a significant impact on
the price consumers pay for their handsets and services.
The same handsets and services that can drive up the gross domestic
product," Mr Toure said.
Craig Ehrlich, chairman of the GSMA said that the association is
encouraging mobile phone manufactures to produce low cost handsets
for the developing world. "The wholesale cost of the cheapest mobile
phone is set to fall to $25 by the end of 2006 compared with $50 in
early 2004," he said.
This study is the first of its kind covering emerging markets and
focusing on developing public and private partnerships between the
mobile industry and governments to eradicate the digital divide.
The writer is affiliated to the Highway Africa News Agency, a South
African based ICT news provider.
http://allafrica.com/stories/200512130534.html
--
Cheers,
McTim
$ whois -h whois.afrinic.net mctim
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