Welcome!

News Feed Item

GSMA Calls for Re-Evaluation and Reduction of Mobile-Specific Taxation across Sub-Saharan Africa

The GSMA today called upon governments in Sub-Saharan Africa (SSA) to review their approach to the increasing tax burden imposed on the mobile industry. The GSMA released two studies that explore various aspects of mobile-specific taxation in Africa and show that this burden is stifling economic growth in those countries that have introduced mobile-specific taxation. The first report, ‘Surtax on International Incoming Traffic (SIIT) in Africa’, examines the impact of SIIT in Sub-Saharan Africa and concludes that the introduction of SIIT can lead to less revenue for mobile operators and governments and higher prices for consumers. A second report, ‘Sub-Saharan Africa Universal Service Fund (USF) Study’, found that most of these funds are not succeeding in delivering their stated goal of widening access to telecommunication services and that alternative market-based solutions are more effective.

“Sub-Saharan Africa is the fastest-growing region globally, with 328 million unique mobile subscribers and an annual growth rate of 18 per cent over the last five years. However, with subscriber penetration of just 37 per cent, there is clearly still huge potential for greater growth ahead,” said Tom Phillips, Chief Regulatory Officer, GSMA. “Beyond further adoption of basic voice services, the region is starting to see an explosion in the uptake of mobile data. However, a short-term focus by some countries on generating revenue through increasing the SIIT, combined with the continued imposition of USF levies despite accumulated funds that are not being effectively employed, will clearly have a negative impact on the domestic mobile sector and other businesses in the region.”

Report Highlights Negative Economic Impact of SIIT in Africa

The report Surtax on International Incoming Traffic (SIIT) in Africa studies the effects of the SIIT in six countries in Sub-Saharan Africa and on regional integration. The report’s findings are in line with a recent publication from the Organisation for Economic Co-operation and Development (OECD)1 that shows that imposing higher charges for the termination of international inbound traffic suppresses demand. Similar to the GSMA’s study, the OECD report concludes that those governments that impose higher termination charges do not see their revenues increase proportionately. The report outlines the impact for consumers, governments and businesses:

  • Consumers - SIIT effectively fixes prices for international traffic termination and in these countries where it is imposed, the SIIT has caused the price of terminating international incoming calls to increase by an average 97 per cent, with an increase of up to 247 per cent in Burundi;
  • Governments - SIIT has already shown its potential to create economic losses to governments that impose it. The report estimates that, in the absence of the SIIT, mobile operators could have terminated an extra 1.2 billion international minutes and generating $86 million in revenues from June 2010 to March 2014, indicating that governments could have gained an extra $27.5 million across the period had the SIIT not been introduced; and
  • Businesses - SIIT creates significant extra costs to African businesses that trade with, and therefore call, businesses in countries where the SIIT has been imposed, negatively affecting regional integration. Evidence from mobile operators indicates that nearly 40 per cent of all international incoming traffic is from countries in the region, and in some countries, such as Tanzania, over 50 per cent of calls originate within Africa.

USF Report Highlights Need For Alternative Methods to Achieve Universal Service

The Sub-Saharan Africa Universal Service Fund Study finds that USFs in the region do not appear to be the most appropriate mechanism for providing universal access and service, and to furthering social and economic improvement in a proactive, cost-effective and transparent manner. Generally, the report found significant deficiencies in fund structure, management and operation throughout the SSA region. The report concludes that consideration must be given to disbanding inactive funds and returning the remaining monies to the operators who paid the levies in the first place and, where this is not feasible, gradually reducing the levy collected for either inactive or low activity funds and gradually phasing out the funds. The study found that alternative approaches to achieving universal service, such as license obligations, are often more effective than USFs.

Both reports have identified countries within the region that have recognised the negative impact of both the SIIT and USFs on trade and regional integration. The two studies conclude that in light of these negative consequences, other governments should re-consider the SIIT and USF and assess the specific impact on their economies and on economic development for the region as a whole.

“Mobile is an important contributor to the economy of Sub-Saharan Africa, accounting for more than six per cent of the region’s GDP, more than any other comparable region globally,” continued Phillips. “As our research has shown, taxation as a proportion of the total cost of mobile ownership in the region is also higher than the global average, a factor that makes mobile services less affordable for end users. The SIIT is clearly being used as an opportunistic short-term revenue tool by some governments and, in reality, USFs have become an unnecessary levy on the telecommunications industry. We strongly feel that eliminating harmful mobile-specific taxation would benefit consumers, businesses and governments by encouraging the take-up of new mobile services, improving productivity and boosting GDP and overall tax revenues in the longer term.”

Notes to Editors

OECD (2014), "International Traffic Termination", OECD Digital Economy Papers, No. 238, OECD Publishing 10.1787/5jz2m5mnlvkc-en.

The GSMA reports can be found at: www.gsma.com/publicpolicy/tax/research-and-resources

About the GSMA

The GSMA represents the interests of mobile operators worldwide. Spanning more than 220 countries, the GSMA unites nearly 800 of the world’s mobile operators with 250 companies in the broader mobile ecosystem, including handset and device makers, software companies, equipment providers and Internet companies, as well as organisations in industry sectors such as financial services, healthcare, media, transport and utilities. The GSMA also produces industry-leading events such as Mobile World Congress and Mobile Asia Expo.

For more information, please visit the GSMA corporate website at www.gsma.com. Follow the GSMA on Twitter: @GSMA.

More Stories By Business Wire

Copyright © 2009 Business Wire. All rights reserved. Republication or redistribution of Business Wire content is expressly prohibited without the prior written consent of Business Wire. Business Wire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
DevOps is often described as a combination of technology and culture. Without both, DevOps isn't complete. However, applying the culture to outdated technology is a recipe for disaster; as response times grow and connections between teams are delayed by technology, the culture will die. A Nutanix Enterprise Cloud has many benefits that provide the needed base for a true DevOps paradigm.
What sort of WebRTC based applications can we expect to see over the next year and beyond? One way to predict development trends is to see what sorts of applications startups are building. In his session at @ThingsExpo, Arin Sime, founder of WebRTC.ventures, will discuss the current and likely future trends in WebRTC application development based on real requests for custom applications from real customers, as well as other public sources of information,
SYS-CON Events announced today that Interoute, owner-operator of one of Europe's largest networks and a global cloud services platform, has been named “Bronze Sponsor” of SYS-CON's 20th Cloud Expo, which will take place on June 6-8, 2017 at the Javits Center in New York, New York. Interoute is the owner-operator of one of Europe's largest networks and a global cloud services platform which encompasses 12 data centers, 14 virtual data centers and 31 colocation centers, with connections to 195 add...
Historically, some banking activities such as trading have been relying heavily on analytics and cutting edge algorithmic tools. The coming of age of powerful data analytics solutions combined with the development of intelligent algorithms have created new opportunities for financial institutions. In his session at 20th Cloud Expo, Sebastien Meunier, Head of Digital for North America at Chappuis Halder & Co., will discuss how these tools can be leveraged to develop a lasting competitive advanta...
TechTarget storage websites are the best online information resource for news, tips and expert advice for the storage, backup and disaster recovery markets. By creating abundant, high-quality editorial content across more than 140 highly targeted technology-specific websites, TechTarget attracts and nurtures communities of technology buyers researching their companies' information technology needs. By understanding these buyers' content consumption behaviors, TechTarget creates the purchase inte...
With the introduction of IoT and Smart Living in every aspect of our lives, one question has become relevant: What are the security implications? To answer this, first we have to look and explore the security models of the technologies that IoT is founded upon. In his session at @ThingsExpo, Nevi Kaja, a Research Engineer at Ford Motor Company, will discuss some of the security challenges of the IoT infrastructure and relate how these aspects impact Smart Living. The material will be delivered i...
In his session at @ThingsExpo, Eric Lachapelle, CEO of the Professional Evaluation and Certification Board (PECB), will provide an overview of various initiatives to certifiy the security of connected devices and future trends in ensuring public trust of IoT. Eric Lachapelle is the Chief Executive Officer of the Professional Evaluation and Certification Board (PECB), an international certification body. His role is to help companies and individuals to achieve professional, accredited and worldw...
My team embarked on building a data lake for our sales and marketing data to better understand customer journeys. This required building a hybrid data pipeline to connect our cloud CRM with the new Hadoop Data Lake. One challenge is that IT was not in a position to provide support until we proved value and marketing did not have the experience, so we embarked on the journey ourselves within the product marketing team for our line of business within Progress. In his session at @BigDataExpo, Sum...
Your homes and cars can be automated and self-serviced. Why can't your storage? From simply asking questions to analyze and troubleshoot your infrastructure, to provisioning storage with snapshots, recovery and replication, your wildest sci-fi dream has come true. In his session at @DevOpsSummit at 20th Cloud Expo, Dan Florea, Director of Product Management at Tintri, will provide a ChatOps demo where you can talk to your storage and manage it from anywhere, through Slack and similar services ...
SYS-CON Events announced today that SoftLayer, an IBM Company, has been named “Gold Sponsor” of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2016, at the Javits Center in New York, New York. SoftLayer, an IBM Company, provides cloud infrastructure as a service from a growing number of data centers and network points of presence around the world. SoftLayer’s customers range from Web startups to global enterprises.
SYS-CON Events announced today that Ocean9will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Ocean9 provides cloud services for Backup, Disaster Recovery (DRaaS) and instant Innovation, and redefines enterprise infrastructure with its cloud native subscription offerings for mission critical SAP workloads.
Have you ever noticed how some IT people seem to lead successful, rewarding, and satisfying lives and careers, while others struggle? IT author and speaker Don Crawley uncovered the five principles that successful IT people use to build satisfying lives and careers and he shares them in this fast-paced, thought-provoking webinar. You'll learn the importance of striking a balance with technical skills and people skills, challenge your pre-existing ideas about IT customer service, and gain new in...
SYS-CON Events announced today that Juniper Networks (NYSE: JNPR), an industry leader in automated, scalable and secure networks, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Juniper Networks challenges the status quo with products, solutions and services that transform the economics of networking. The company co-innovates with customers and partners to deliver automated, scalable and secure network...
Interoute has announced the integration of its Global Cloud Infrastructure platform with Rancher Labs’ container management platform, Rancher. This approach enables enterprises to accelerate their digital transformation and infrastructure investments. Matthew Finnie, Interoute CTO commented “Enterprises developing and building apps in the cloud and those on a path to Digital Transformation need Digital ICT Infrastructure that allows them to build, test and deploy faster than ever before. The int...
VeriStor Systems has announced that CRN has named VeriStor to its 2017 Managed Service Provider (MSP) 500 list in the Elite 150 category. This annual list recognizes North American solution providers with cutting-edge approaches to delivering managed services. Their offerings help companies navigate the complex and ever-changing landscape of IT, improve operational efficiencies, and maximize their return on IT investments. In today’s fast-paced business environments, MSPs play an important role...