Anxiety grows as mobile phone operators fears to lose customers on Sim card tax

AS the wrangle over the imposition of Sh. 1,000 tax on Sim card that was recently introduced by the government on its 2013/14 budget is still going on, credible sources in the telecom industry have said that, the blessings on the tax will make them lose customers during their operational services. Speaking in an exclusive interview  some mobile phone operating companies have said that, very few customers will manage to pay the tax as most mobile phone users especially rural customers hardly could afford to purchase airtime vouchers for their cell phones.  Giving the statistics from their customers’ database reports and their ability to make daily calls for communication, some have revealed that, there are customers who stay for about three months without buying airtime voucher  while some are unable to make calls through and instead rely on beeping. In view of this, they wonder as to how could they manage to pay the introduced monthly fee of Sh. 1,000/- and yet most Tanzanians especially those living in rural areas are faced with poverty,  an anonymous source from Vodacom the leading mobile phone company in the country queried.According to the source, 48 percent of the total country’s population are registered mobile phone users which is equivalent to about 22 million Tanzanians. Out of this, however the source maintains that, only 8 million people are able to maintain their cell phones in terms of buying airtime vouchers and make calls. The available statistics verifies the fact that the remaining 14 million phone subscribers are risk to deregistration due to their inability to pay the tax as per the finance Act 2013. “This will be a great loss to mobile companies” they stressed and appealed that, the government should review the Act in order to save their customers. However, they have also noted that, the introduction of tax on Sim cards will retard the development and growth of the Information and Communication Technology (ICT) sector for which they are spearing in the country as many people are likely to skip due to high taxation. They have further noted that, the establishment of the mobile companies in the country was to revamp the communications sector with a view to explore the sector and enable people communicate at a cheapest rate. They are on the view of the fact that, the imposition of numerous levies is likely to prevent other people from joining the communication sector as prospective customers would all the time be thinking of finding ways on how to pay the tax. On Tuesday this week, President Jakaya Kikwete directed telecom firms, the treasury and the ministry of Communication, Science and Technology to resolve the on-going wrangle and had requested members of the Mobile Operators’ Association of Tanzania (MOAT) to look for a solution on how to settle the Sh. 178 billion tax to be charged if the proposal to scrap off tax on Sim card would be accepted by the government. The President noted that, it was impossible to drop the tax without finding optional sources of revenues to cover the deficit in the budget and the finance Act that has already been enacted. The President’s call came five days after the mobile firm’s top officials met with the Finance Minister Dr. William Mgimwa whereby he promised mobile operators that, the government would consider their recommendations over the review of the tax. Prior to the meeting, the MOAT members had sent a letter to Tanzania Revenue Authority (TRA) as they were puzzled by some changes included in the finance Act 2013 and claimed about application, practicability and challenges they face in implementing the new Act. Together with the tax on Sim cards, the Act also introduced 10 percent withholding tax on commission paid to mobile money agents but the operators claimed as it is grouped in different categories. MOAT’s spokesperson Sylvia Balwire declined to make further comments when contacted on Thursday, and instead she sent a message which was relayed by unidentified lady at a customer care counter in her office who told the writer of this news to contact the State House. Meanwhile, the survey by the Guardian carried in all five mobile operating companies accredited in the country has established that, none of the companies have v started to charge their customers the said amount which they expect it to deduct from the amount of airtime Sh. 33.40 per day. The companies are Vodacom, Zantel, Tigo, Airtel and TTCL Mobile