Ictam blames taxes for rising Internet cost
Information Communication and Technology Association of Malawi (Ictam) has cited the 26.5 percent tax levied on Internet, poor infrastructure and operational costs as the drivers of expensive data prices.
Ictam president Bram Fudzulani said this in an interview on Sunday in the context of published figures from the International Telecommunication Union (ITU) 2019 Measuring Digital Development ICT Price Trends which indicate that Zambia at 33.5 percent and Tanzania at 32.5 percent have higher taxes while Zimbabwe at 25 percent and Mozambique at 17 percent have taxes lower than Malawi.
He said removing 10 percent exercise tax would help promote digital inclusion and support the delivery of essential services.
Said Fudzulani: “While lack of infrastructure and competition have been some of the contributing factors, as an association, we have also pointed out for a long time that in Malawi Internet is heavily taxed.
“Every time someone buys a bundle, they are paying a total of 26.5 percent in taxes [with 16.5 percent in value added tax] and we have been lobbying through government to remove the excise tax of 10 percent if we are to truly talk about connecting more Malawians to the digital economy.”
However, despite the tax variances, affordability-wise, Malawi at 178 still lags behind on mobile data out of 183 economies, with Zambia at 146, Tanzania at 164, Zimbabwe at 165 and Mozambique at 170 having affordable data rates.
Consumers Association of Malawi executive director John Kapito said in an interview on Monday that mobile phone usage remains one of the lowest due the high cost of Internet.
“With the Covid-19 pandemic, we are encouraging our children to go online for their education, but the price is so prohibitive for any ordinary student to afford,” he said.
But TNM plc chief executive officer Michiel Buitelaar said considering the country’s geography, demography and economy, Malawi rates are low with one gigabyte (Gb) going to as a low as K570.
He said: “Malawi comes with at least two irregular costs: taxes are very high with additional excise taxation for telecoms.”
On her part, Airtel Malawi plc corporate communications and CSR manager Norah Chavula-Chirwa said one Gb can be sold at as low as K560, but cost of operations remains high.
“We continue to work towards bridging the digital divide and working to always avail the best networks at the most affordable rates,” she said.
Malawi Communication Regulatory Authority recently announced that it has set up a Universal Access Fund, which collects money from information and communication technology players.
The fund will, among others, ensure fast and affordable Internet services, especially in rural and under-served areas using fees collected from operators.
