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Telco traffic monitoring system another tax burden says Econet

By , Sub Saharan Africa Business, Tech, News and Development Journalist
Zimbabwe , 14 Jul 2022

Zimbabwe’s new Telecommunications Traffic Monitoring System (TTMS) adds a new tax obligation for operators said Econet Wireless said on Thursday as it reported a surge in data and revenue incomes for the full year period to end February 2022.

The Posts and Telecommunications Regulatory Authority of Zimbabwe (Potraz) installed the monitoring system onto the platforms of mobile firms to combat network fraud and address billing integrity issues.

However, Chairman of Econet Wireless James Myers argued that the system simply adds a new tax burden.“The system attracts an additional tax of US 6 cents per minute on international incoming traffic, payable in foreign currency. This increases the taxes that are levied on the telecommunications sector which is already subjected to a 10% excise duty on revenues.”

Other statutory taxes imposed on telecommunications firms include a 14.5% VAT levy, in addition to other regulatory levies and taxes of 3.5%.

This brings “the total taxes on each dollar of revenue to approximately 28%” and this is “prior to the allocation of any operating costs applied in the determination of the company’s liability” for income taxes.

“These taxes are generally higher than the African average and have the impact of increasing the connectivity costs for consumer,” said Myers.

Despite this, Econet recorded a 58% and 19% surge in income from data and voice services respectively for the period under review.

The company added, “Our results for the year ended 28 February 2022 reflect increasing demand for broadband and data services across the country.”

In addition to infrequent tariff reviews, companies continue to face the challenge of having to meet a growing demand for data services due, in part, to limited access to foreign currency.

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