Parliament waives out SIM card tax, approves communication service tax

THE National Assembly on Saturday last week approved the amendment of the Cap No: 147 of the Excise Management and Tariff (amendment) Bill 2013 which was tabled in the house by deputy minister for Finance Saada Mkuya. The Bill was proposed by the government in a bid to waive out the monthly SIM Card tax of Sh. 1,000 as approved earlier in July this year during parliamentary budget session for 2013/14 financial year. This follows claims by the electronic communication companies and users of cell phones in the country most of whom are the poorest who could not afford the proposed monthly amount of money to be paid in Tanzania shillings as tax as it is too expensive according to the capacity of their usage. Alongside with this amendment, the parliament has also approved the amendment of the provision No. 124, clause (6c) of the Excise Management Act, which has increased taxes to be charged on the electronic communication services from 14.5 percent to 17 percent respectively. Under the system proposed, the deputy finance minister noted that this would enable every user of the electronic communications services in the country to pay such tax according to the capacity of his or her usage. However, minister Saada noted that, the system would effectively start in January 2014.  According to Saada, whoever uses more services will pay more, and those who limits their uses will also pay less. However, she clarified without analyzing how the rates of payments would be manifested in the financial debt transactions. She said, the system has been coordinated to favor the poor especially rural dwellers and will be contrary the earlier system which had proposed a uniform rate of payment for every user without considering the rate of each one’s capacity of usage.  The decision by Parliament was reached after a short debate over the issue whereby some legislators blamed the government for having delayed the money which the communication companies were supposed to pay immediately when the Bill was first passed by house in July this year. Some legislators blamed the government in the whole process of making their proposals saying that, stakeholders in the electronic communication industry were not involved in the process. Saleha Pamba (CCM) noted that, it was prudent to include all communication companies in this process before coming into a decision over the matter in Parliament. He said and called onm fellow law makers to do what he termed as political ground work in order to have transparency on the matter for Tanzanians. He said that, the earlier proposed SIM card tax rate was so expensive in comparison with what is being charged by other East African Community member states. A nominated ;legislator (NCCR-Mageuzi) James Mbatia openly noted that, the amendment of the Bill has some sort of cheatings in the sense that it shows that, there are some government  executives who are not working with efficiency. He queries the rationale of the government to bring back its own bill which it had proposed and later approved, now it should have been amended an aspect there might have caused some losses incurred on the part of the implementation.

Deputy minister for Finance Mrs Saada Mkuya

In view of this however, he has advised the government to hire money for the development for the time being while the taxes are being prepared in a short while. Mwigulu Mchemba (CCM) than ked the government to have listened its people when it has decided to waive out the tax saying that, it would help the poor who had become psychologically affected when the announcements were made in July this year. However, he has insisted that, tax payments for the local people is important for their country’s development and it is therefore necessary to implement it as it is the nation which benefits. In July this year, the government had allocated billions of shillings for the development of rural electrification in the country, and part of the allocated money was directed to be contributed by electronic communication companies through monthly SIM card taxation. The decision by the government had later on caused a mutual of understanding between the government and the company’s owners who saw it impracticable for fear of losing customers in the local market. Under the system, all electronic communication companies were ordered to pay a monthly tax of Sh. 178.4 billion, the money which has never been collected since the Act was passed by the house six months ago. The resistances over the payments followed a controversy which had arisen between the government and the communication business companies who resort to seek for a solution before the court of law. Likewise the stakeholders and the public in general especially users of cell phones were nlot happy by the government’s decision and raised claims that, the amount of money was so great and not affordable.