US$50 tax on mobile phones retrogressive and outrageous – top economist

Zimbabwe National Chamber of Commerce CEO Christopher Mugaga has slammed Finance minister Mthuli Ncube’s new $50 levy on all new smartphones used in Zimbabwe which will see a spike in the prices of cellphones.

This is in addition to a 25% customs duty on imported handsets. Ncube is seeking new revenue streams as he nearly doubled the country’s proposed spending in its annual budget this week.

“I think it was a very wrong move. The call for digitization around the world is palpable, every nation is moving for digitization and this move by minister Mthuli Ncube to push for the this levy on handsets alleging that there was a slot of smuggling of the product, does not hold water. Because if that was the argument we could have been seen more being done for second hand cars, effort also on the smuggling of minerals,” Mugaga said during a discussion on Business and Politics.

“Its anti-digitasation…The other question I am asking myself is remember that it’s the line that is registered and not the gadget. Is there capacity to administer the levy and monitor clients? How do you handle multiple lines in a single gadget? What happens to handsets that cost less than US$50? A lot of people cannot afford the levy that’s what it means on this. How about locally sourced gadgets? There is too many questions that have to be answered. I feel this move is threat on digitization. Infrastructure is already limited with high levels of unemployment. The populace can only transact using handsets. Even mobile money transactions can only thrive with handsets. I don’t think it was a good move,” Mugaga added.

Ncube said that Zimbabweans have been avoiding already existing levy through smuggling smartphones into the country.

“Whereas imported cellular telephone handsets attract modest customs duty of 25%, the funds released, however, point to evasion of the customs duty due to the nature of the items which can easily be concealed,” he said.

The Zimbabwean government will now require mobile network operators – including Econet Wireless and NetOne – to collect the $50 levy on each smartphone “prior to registration”. Zim Morning Post