Under pressure, the Malawian government says it is planning to revise taxes imposed on telecommunication companies to reduce the high cost of communications, as well as establish the Malawi Information Technology Authority to strengthen governance.
Currently, the government has imposed a 17.5% Value added tax (VAT) on the importation of mobile phones, a 16.5% on internet services and an additional 10% excise duty on mobile phone text messages and internet data.
The Minister of Information and Digitalisation Gospel Kazako said taxes in the telecommunications industry limit the country’s digitalisation drive: “The creation of an e-economy cannot be achieved if gadgets are not available and if a few people are using these technologies. So I have been engaging my colleague, the Minister of Finance to see how we can remove these taxes without compromising revenue and economic affairs. We have to review certain things that will promote the use of smartphone and the internet. Further, we intend to create the Malawi Information Technology Authority to ensure good coordination in government.”
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ICT Association of Malawi (ICTAM) president Bram Fudzulani said his organisation is keen to assist: “We have agreed to formalise ourselves and form a taskforce that plays a voluntary advisory role to the Ministry of Information and Digitalisation on what we think are the best practices that need to be done and the policies that need to be implemented so that we create a conducive environment for the industry players and at the same time protect consumers. We are also sure that the formation of the Malawi Information Technology Authority will put the telecommunications sector in order and help to accelerate the adoption of ICT in the country.”
Civil society organisations continue to lobby government to revise the current tax structure and argue that this increases already high costs of digital communications.
Market research conducted on the country’s telecommunications indicate that taxation, market and regulatory structures that do not encourage competition impede efforts to reduce the cost of voice, mobile data and the extension of broadband coverage.
