Tonderai Rutsito TechSpot
Zimbabwe is on record as the world`s second fastest ICT developing country with an all time record of 106 percent mobile penetration.
Data penetration is on 47 percent meaning 6,1 million subscribers out of the total 13,89 million now have access to the internet.
While there was a major increase in the fixed telephone subscribers by 7,2 percent to 326,183 the major mover is still in the mobile market.

Coming from an all time low of 11 percent in 2010, in data penetration, it is not a secret that the availability and affordability of mobile devices have been greatly buoyed this major statistical move. In fact the Government can actually measure this as a major contribution to the Gross Domestic Product growth.

Unfortunately a few weeks ago, Finance Minister Patrick Chinamasa  announced what could signal the death of tremendous growth in ICT as players have cried foul on the introduction of tax 25 percent plus to add to the 15 percent VAT, which will see the landing cost of mobile phone carrying an additional 40 percent cost.

Obviously this cost will be passed on to none other than the consumers, a move which will definitely dampen the spirits and incite market resistance as the cost of mobile handsets is sky-rocketing beyond the reach of many.

The minister also introduced excise duty of 5 percent on air time for both voice and data with effect from 15 September 2014, while the Customs duty  on mobile handsets is now levied with effect from October 2014.

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, 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 be 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 along with the new trends.

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 the environment.

The new levies will likely see a very slow growth, as we are also in a 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 it’s only prudent to revitalise the fiscus from an active component of the economy,  the 25 percent was too sharp, rather a meagre fee to be subsequently reviewed would have been a better way to stimulate the economy.

  • The Writer is the editor for TechnoMag, Zimbabwe`s Premier technology magazine more in depth on www.technomag.co.zw  follow us on twitter @TechnoMagzw, www.facebook.com/technomagzw mail [email protected]

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