African governments urged to ease tax burden on mobile industry

Heavy tax burdens imposed on the mobile telecoms industry are having negative impacts on its growth, an industry lobby group has said.

The GSM Association (GSMA) has said that despite an explosion in mobile data uptake, some governments’ focus on generating revenue through increasing levies on operators is having a negative impact on the domestic mobile sector and other businesses in the region.

The association, which represents the interests of mobile operators across the globe, has called on governments in Sub-Saharan Africa to review their approach to the increasing tax burden imposed on the mobile industry.

“Sub-Saharan Africa is the fastest-growing region globally, with 328 million unique mobile subscribers and an annual growth rate of 18 per cent over the last five years. However, with subscriber penetration of just 37 per cent, there is clearly still huge potential for greater growth ahead,” said Tom Phillips, GSMA chief regulatory officer.

The association has released two studies exploring various aspects of mobile-specific taxation in Africa. The research notes the burden is “stifling economic growth in those countries that have introduced mobile-specific taxation”.

The first report, “Surtax on International Incoming Traffic (SIIT) in Africa”, examines the impact of SIIT in Sub-Saharan Africa and concludes its introduction can lead to less revenue for mobile operators and governments, and higher prices for consumers.

The second report, “Sub-Saharan Africa Universal Service Fund (USF) Study”, found most of these funds are not succeeding in delivering their stated goal of widening access to telecommunication services and that alternative market-based solutions are more effective.


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