Zambia hints at fifth telco operator

A fifth telco
for Zambia?

Enough room says
industry regulator.

ITWeb Africa

Saturday, Feb 22nd

Kenya's Safaricom warns against more tax rises

MpesaMoney1

Kenya's leading mobile phone operator Safaricom cautioned the government against further rises in excise duty on mobile money transfers, saying there was a risk new county-level administrations would add to the tax burden.

Chief executive Bob Collymore said on Thursday futher tax increases would put a service that has deepened financial inclusion, particularly in rural areas, beyond the reach of the poor.

The company said in May that a 10% tax imposed in late 2012 on transfers using its M-Pesa mobile service had forced it to absorb costs of 400 million shillings ($4.6 million) in the 2012/13 financial year to shield consumers from the full burden.

"Mobile money is still relatively new and government should be wary of putting any additional tax burden on the customer, and in particular on the poor who rely on M-Pesa more than any other," Collymore told the company's annual general meeting.

Collymore said more than 28 shillings out of every 100 shillings charged to a telecoms customer went to the taxman, making Kenya's telecoms taxes amongst the highest in the world.

He said he worried that could rise yet higher if county governments, which were introduced this year, targeted the telecoms sector to raise revenues.

"This is an industrywide area. We have seen one county which attempted to charge fees for putting fibre (optic cable) on the ground," he said. "We are urging governors and local county governments not to take a short term approach because operators will inevitably deprioritise those counties."

The county governments have been allocated funds from the national budget to pay for projects but will have to meet shortfalls by raising their own revenues.

No government tax officials could immediately be reached to comment on prospects for increases in excise duty.

Safaricom, 40% owned by Britain's Vodafone, posted record pretax profits of 25.5 billion shillings ($304.30 million) last year. M-Pesa accounted for 18% of revenue, a share expected to climb to 20% within two years.

Mobile money transfers are used by workers in cities to send money to rural families and increasingly are also a means to pay utility bills or buy goods in shops such as groceries.

Collymore said Safaricom was still negotiating access to the 4G spectrum with the telecoms regulator.

Other telecoms operators in Kenya are a unit of India's Bharti Airtel, Essar Telecoms' Yu and Telkom Kenya, owned by France's Orange. ($1 = 87.6000 Kenyan shillings).

ALSO ON ITWEB AFRICA

What of Vodafone Ghana's economic future? Published on 12 February 2020

Transfer of control of the company to Vodacom Group reignites speculation over company's local listing.

Global blockchain alliance to support Africa's aviation parts industry Published on 18 February 2020

Stakeholders in Maintenance, Repair and Overhaul (MRO) chain to demonstrate how technology can be used to digitally manage parts.

Safaricom to bid for Ethiopia telco license in April 2020 Published on 20 February 2020

Company looks to cement partnership due to expected high entry costs associated with the market.

Nutanix named one of the 2020 Fortune 100 Best Companies to Work For Published on 20 February 2020

Enterprise cloud computing leader Nutanix has been named among the 2020 Fortune 100 Best Companies to Work For® by Great Place to Work? and Fortune.