At the end of last week, we discovered and reported on the fact that the Zimbabwean government wanted to introduce a US$50 cellphone tax. The question on most people’s mind was whether this was possible. Can the government really force you to pay the tax? The simple answer is yes but in order to do so, they have to overcome some obvious problems that might end up causing more harm than good. So first we will look at how they can do it and then we will look at some problems they will face.
How they can force you to pay?
The way the Finance MInister proposed actually works. All phones come with a unique identifier known as the IMEI. Whenever you put a line/SIM card in your phone that IMEI gets reported to the network. It is therefore possible to configure the network to reject any IMEI it hasn’t seen before. This effectively means that the new phone won’t be able to connect to that network. What the minister wants is for all new phones to be blocked on all Zimbabwean networks until the owner either pays tax or duty.
The problems and hurdles
There are several problems with this blunt method of forcing people to pay tax by blocking them from the networks:
- People already have cellphones they use, they are not registered as the norm these days it to allow all devices to join Zimbabweans networks
- It is doubtful that networks currently maintain a register of IMEs that are already on their network. Beginning to do so will probably require new hardware and software. Data and calling is already expensive because importing equipment is already expensive. Asking mobile operators to invest in even more equipment will lead to more costs being passed on to final consumers
- There are a lot of phones that cost less than US$50 and there are a lot of phnes that would have paid more than US$50 e.g. duty for an iPhone is way above the US$50. It means this is a regressive tax that will punish the poor and reward the rich. A regressive tax is hardly what we need.
- This tax system gives ZIMRA too much to do. They will have to issue certificates and refund people. Will they be able to do this? It’s very unlikely. The system will almost certainly be riddled with corruption. Some people will pay to not pay the US$50. We have lived long enough to know that this is a certainity.
- What about tourist and returning Zimbabweans who are coming back temporarily? Do they have to pay the tax? Will their monies be refunde din cash or in electronic format using the loathed official rate?
Again so many hurdles and questions. We have also lived long enough in Zimbabwe to know that the Zimbabwean government will not mind implementing the stupid ideas especially if they have the potential to enrich those at the top. This tax might happen despite it’s fatal flaws.