The current Finance Minister Mthuli Ncube is associated with the controversial 2% for which he is equally loathed and praised. That is however about to change. In his latest budget presentation, the Finance Minister made a proposal that is going to be highly controversial and is again going to raise the ire of people. He has proposed that there be a US$50 cellphone tax which will be paid by all cellphones before they can join any Zimbabwean network. This means that if you do not pay this tax and import a phone it will not work. It’s not clear how he arrived at the USD50 amount given how most of Zimbabwe’s phones are not even worth that much.
Below is the Minister’s remarks on the issue:
Mr Speaker Sir, whereas imported cellular handsets attract modest customs duty of 25%, the funds realized, however,2022 Budget speech by Minister Ncube
point to evasion of customs duty due to the nature of the items which can easily be concealed. In order to curb tax evasion, I propose to introduce a levy of
US$50 which will be collected prior to registration of new cellular handsets by Mobile Network Providers. However, where duty would have been paid, the Zimbabwe
Revenue Authority will a refund of the levy, within 30 days of receipt of payment from the mobile network operator
While it’s probably true that people are not paying duty on their cellphones that is hardly the point. Cellphones are no longer just cellphones. During this COVID era, they have become lifelines as they are used by students, the general populace and businesses to communicate and keep in touch and conduct business. Zimbabwe’s smartphone penetration is rather low. The government already claims to be having surpluses and are therefore not in need of more revenue. Rather we should be promoting the wider use of technology rather than blindly seeking more revenue for state coffers.
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