New Sim cards tax: Govt `bows` to public pressure

[BabuK]

Finance Minister Dr William Mgimwa


At last the government has succumbed to pressure from public and mobile phone service providers, resulting in the Ministry of Finance announcing yesterday that newly introduced Sh1, 000monthly mobile phone Sim card tax will not be charged until all public complaints and those of service providers are properly reviewed.
Finance Minister Dr William Mgimwa gave the turn of events in Dar es Salaam saying the government had deemed it important to analyse thoroughly the raised views by the service providers.
The views were channeled through the Mobile Operators Association of Tanzania (MOAT) and the general public. The tax on mobile phone Sim cards was passed by Parliament through the Finance Act of 2013 during its lasting sitting in Dodoma.
“We are not about to start charging the introduced tax because we are still working with the system as we don’t want to harm the community,” said Mgimwa at a news conference.
On Friday, he noted that his ministry in collaboration with Communication, Science and Technology ministry had had high level talks with mobile phone service providers to reach a workable solution.
“We received their proposals…also listened to public views; therefore we decided to go through them and thereafter the government will make public a statement concerning the issue,” explained the minister.
He admitted that the public would suffer because of the tax and that is why the government continued receiving their recommendations for taking a decision, aimed at bringing relief to them.
The minister said in the proposal, discussed matters related to legal aspects to be dealt with according to relevant procedures for final recommendations to be submitted to Parliament if necessary.
Mgimwa revealed that his office had received 67 new tax proposals from various stakeholders, including MPs but only 22 proposals were approved, among them the Sim card tax.
Official government statistics show that there are 18 million registered mobile phone Sim cards implying that the government would collect Sh18billion a month or Sh216 annually.
Mgimwa, meanwhile, maintained that the revenue collected from Sim cards tax would remain as planned, namely to develop various rural infrastructures.
Also, the Minister for Science, Communication and Technology Professor Makame Mbarawa said the government would install the Telecom Traffic Management System (TTMS) for controlling various operations by mobile companies.
He added that the system would monitor incoming traffic, identifying mobile money transfer, quality service and other factions.
According to minister the system would officially be installed next month at the Tanzania Communication Regulatory Authority (TCRA).
According to a finance bill amendment passed in June, the government would impose a monthly tax of Sh1,000 or $0.62 on all Sim card users in Tanzania. It is also clamping down on unregistered users to limit tax avoidance.
The new levy is a touchy subject because mobile phone services are booming service in the country.
A World Bank and African Development Bank report indicates that 650 million people on the continent are using mobile phones, and not just for social calls.
One of the most popular services associated with Sim cards is mobile banking, which allows users to store and send money via their phones instead of using a traditional bank account.
These services have become a lifeline for the poor in Tanzania, and critics of the new tax argue that it will hurt these vulnerable users.



SOURCE: GUARDIAN ON SUNDAY