Malawi Confederation of Chambers of Commerce and Industry (MCCCI) has urged Ministry of Finance to review taxation policies on information and communications technology (ICT) services to make Internet services accessible.
MCCCI director of policy and advocacy Madalitso Kazembe said in her presentation made to Minister of Finance Felix Mlusu as part of MCCCI’s contribution to the next budget, that ICT services are generally unaffordable due to high taxation regimes in the sector.
She argued that the high costs make entry into the industry for firms more costly.
Kazembe said: “Internet providers are asked to pay annual licence fees, spectrum fees and an annual sales turnover levy of 3.5 percent by Malawi Communication Regulatory Authority.
“On top of this, Internet is heavily taxed with excise tax at 10 percent and value added tax at 16.5 percent. These, along with the 0.5 percent levy charged by the Malawi Bureau of Standards on ICT equipment coming into Malawi, make the services expensive in the end.”
In response, Ministry of Finance acting director of revenue division and policy Catherine Chilima said the impact of taxation on prices of ICT could be minimal.
“We need to look at capital investments in the sector, coverage in the country, price build-up which includes profit margins and overhead costs,” she said.
Chilima said issues of Internet affordability also need to consider how Malawi fares with other countries in terms of coverage. Earlier this year, Information and Communications Association of Malawi president Bram Fudzulani said levies and taxes have a huge impact on the utilisation and adoption of ICT services in Malawi.