Kenya Unlikely to Lower Airtime Taxes

The Kenyan government is not minded to lower taxes on mobile phone airtime, despite increasing calls from the mobile network operators for action. The country currently levies a 26 percent duty on airtime top-ups.

"The duty paid is important to treasury; if the government scraps the duty, the books will not balance," Uhuru Kenyatta, the minister in charge of finance told IDG News Service.

Instead of addressing the prospect of lowering the tax, Kenyatta chose to dwell on the advantages that submarine fiber-optic cables will provide for the mobile phone services sector.

"We expect arrival of the TEAMS, SEACOM and EASSY submarine cables to reduce cost of communication and solve the problem of insufficient bandwidth," the minister said.

A report commissioned by the GSM Association in Oct 2007 noted that it airtime taxes were lowered or removed, government tax receipts would actually increase as more people will connect and use mobile services, boosting Value Added Tax receipts and stimulating wider economic activity.

Mobile specific taxes are levied in Ghana, Kenya, Tanzania, Uganda and Zambia.

On the web: IDG News Service

Posted to the site on 25th May 2009