Huge Mistake as Gvt Introduces 25% Duty on Mobile Handsets

Zimbabwe has been on record as the world`s second fastest ICT developing country with an all time record of 106% mobile penetration buoyed by a 47% data penetration with a whooping 6.1 million subscribers, who now have access to the internet.

The total number of mobile subscribers in Zimbabwe currently stands at 13,892,109 a figure which has grown in leaps and bounds over less than 5 years while there was relatively a major increase in the fixed telephone subscribers by 7.2% to reach 326,183 the major mover is still in the mobile market.
By Toneo Tonderai Rutsito
MSU IT director Mr liberty Dandira working with his team of software developers
Coming from an all time low of 11% in 2010, in data penetration, it is not a secret that the availability and affordability of mobile devices have greatly attribute to this historic major statistical move which in return the government can actually measure as a major contribution to the Gross Domestic Product growth.

Unfortunately few weeks ago, the Finance Minister, Honorable Patrick Chinamasa announced what could signal the death of tremendous growth in ICT as players have cried foul on the sharp introduction of tax pat 25% plus the already charged 15% VAT which will see the landing cost of mobile devices carry an additional 40% cost factor.

Obviously this cost will be passed to none other but us the consumers, a move which will definitely dampen the spirits and  provoke market resistance as the cost of mobile handsets is already skyrocketing beyond reach of many.

The minister levied excise duty of 5 percent on air time for both voice and data with effect from September 15, while the Customs duty on mobile handsets was levied with effect from October 2014, effectively the tone has already changed.

During his presentation, the minister said that,“Honourable Members would recall that Government reduced rates of customs duty on mobile handsets, with effect from 1 August 2009, in recognition of access to information as an essential tool to enhance decision making in the global village, and also to encourage the development of Information Communication Technology (ICT), in line with international trends.
“Handset purchases have increased significantly and mobile telephone penetration rates have also increased substantially to over 100 percent. Customs duty reduction has, thus, achieved its intended purpose.
“I, therefore, propose to levy customs duty on mobile handsets at a rate of 25 percent, with effect from 1 October 2014.”
While this may true in principle, the fact is that Handsets are not more different from perishable goods, users would need to consistently upgrade, resale swap as they move with the new trend.
The number of users who already have these handsets is not a fixed one as handsets are also delicate, prone to damages, some will be lost or stolen while many will need replacements, thus as these are not fixed terminals, the statistics too are sensitive to environment.
The new levis will likely see a very slow growth, as we are also in liquidity crunch, replacing cell phones will soon be a luxury for many , likely pitting us back to the yester years where millions could not afford or let alone think about replacing their mobile handsets.
While its only prudent to revitalize the fiscus from an active component of the economy, it will be too risky overburden ICTs as the 25% was just but too sharp, rather a meager fee to be subsequently reviewed would have been encouraging and a better way to stimulate the economy

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