ZNCC advocates for the revision of the airtime levy

The special excise duty on airtime (SED) which was introduced at five percent in 2014 and was reviewed to 10 percent in 2017 is threatening businesses’ viability hence, businesses have called on the government to adjust its treatment of the levy

According to the Zimbabwe Revenue Authority, the levy is a direct tax, meaning that the sale value upon which it is charged forms part of gross income for tax purposes.

In a statement, the Zimbabwe National Chamber of Commerce (ZNCC) said the SED results in double taxation thus, the levy is not allowable as an income tax deduction.

“The resultant effect of charging SED on the sale value of airtime will mean that income to a service provider will suffer income tax based on the gross ales and later on the profits after the deductions of exemptions and allowable deductions,” read the statement.

ZNCC underscored that the taxation goes against the principles of taxation, which are equality, fairness, convenience, flexibility and economic.

“This treatment of the SED will negatively impact the profitability of the service providers and it is likely to affect their profitability,” read the statement.

ZNCC said if the authorities insist on including levy in income tax computations it should be allowed as a deduction thus, it implored the authorities to back date the levy to 1 October 2014.

Leading mobile services provider, Econet Wireless Zimbabwe in its most recent financial results hinted that another tariff review is due for the sector to remain viable because of the experienced inflationary pressures.

“Our headline tariffs were last reviewed in August 2020. All our pricing is determined by the regulator using given cost inputs.

“The timely adjustment of tariffs using the Telecommunications Pricing Index, is critical to our continued viability as a business,” read the Econet’s statement that accompanied its financial results.

 

Leave a Reply

Your email address will not be published. Required fields are marked *

Check Also

Africa faces 470 million COVID-19 vaccine shortfall in 2021: WHO

The World Health Organization (WHO) says Africa faces almost 500 million doses short of th…