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Zimbabwe: Econet pushes for reduction in smartphone customs duties

By , Sub Saharan Africa Business, Tech, News and Development Journalist
Zimbabwe , 02 Nov 2020

Zimbabwe’s biggest mobile company, Econet, is pushing for a review of duties payable on imports of smartphones to boost adoption and internet usage.

The country has experienced a rise in its internet penetration rate to over 50%, and according to the Posts and Telecommunications Regulatory Authority of Zimbabwe (Potraz), WhatsApp and Facebook bundles account for nearly half of all internet usage.

Econet says however that the local penetration rate for smartphones is lower compared to regional counterparts like South Africa.

The company is now lobbying government to reduce import duties on smartphones to encourage more widespread adoption.

“Smart phone penetration is low at 52%, compared to about 90% for South Africa, (it) remains a limitation for the adoption of digital services,” said Econet chairman James Myers on Saturday.

Myers added that approximately 22% of the devices on the company’s network trying to access data services are feature phones with low data handling capacity.

This presents an opportunity to boost consumption of digital services in the country, although a worsening economic situation remains a challenge.

Local consumers have had to battle with inflation as well as government taxes and levies on telecommunications services.

The southern African country has continued to levy a 25% customs duty on mobile handsets since October 2014.

There are also other levies on top up purchases for data and voice. Added to this is the intermediated money transfer tax on digital finance transactions that now also include foreign currency payments and transfers.

“We are working closely with the government to review the duty regime for mobile devices to enhance the rapid adoption of digital services across the economy,” said Myers.

According to the Q2 2020 Potraz telecom industry report “active internet and data subscriptions declined by 2.4% to reach 56.7% from 59.1% recorded in the previous quarter”.

This came as a surprise as industry executives had hoped that the COVID-19 lockdown restrictions would boost uptake and utilisation of internet and other telecom services.

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