Tuesday, 25 September 2018

Zambia considers VoIP tax to bolster falling telco revenues

By Chris Kelly, Total Telecom
Monday 20 August 18

A number of nations in sub-Saharan Africa are looking at strategies to tax their citizen's internet usage

The southern African nation of Zambia has announced that it will introduce a tax levied on Voice over Internet Protocol (VoIP) calls, such as those offered by Skype, Whatsapp and Facebook…

The southern African nation of Zambia has announced that it will introduce a tax levied on Voice over Internet Protocol (VoIP) calls, such as those offered by Skype, Whatsapp and Facebook.

The tax is being implemented to counteract the steep decline in revenues generated by traditional voice call services provided by the country's telcos.

"The use of internet phone calls is threatening the telecommunications industry and jobs in companies such as Zamtel, MTN, and Airtel. Government has therefore introduced a 30 Ngwee-a-day tariff on internet calls," said Dora Siliya, Zambia's Minister of Information and Broadcasting Services.

The 30 Ngwee per day tax equates to approximately $0.10 (USD) at today's exchange ratesand would be collected at source by the country's telcos. 

Zambia is not the first African nation to consider taxing its citizen's internet usage, with Uganda recently announcing a $0.05 per day social media tax. The move would seriously hamper the business model of social media giants like Facebook, whose operations are based on the assumption that users are able to access their services free of charge. Facebook has not formerly commented on Uganda's social media tax but the move is understood to be a key stumbling point as the company looks to increase its investment levels in Africa.

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