GSMA Seeks Reduction of Mobile-Specific Tax across Sub-Saharan Africa

The GSMA yesterday called upon governments in Sub-Saharan Africa (SSA) to review their approach to the increasing tax burden imposed on the mobile industry.

The GSMA released two studies that explore various aspects of mobile-specific taxation in Africa and show that this 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 that the introduction of SIIT can lead to less revenue for mobile operators and governments and higher prices for consumers.

A second report, ‘Sub-Saharan Africa Universal Service Fund (USF) Study’, found that 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.

“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, Chief Regulatory Officer, GSMA.

“Beyond further adoption of basic voice services, the region is starting to see an explosion in the uptake of mobile data. However, a short-term focus by some countries on generating revenue through increasing the SIIT, combined with the continued imposition of USF levies despite accumulated funds that are not being effectively employed, will clearly have a negative impact on the domestic mobile sector and other businesses in the region.”