Goodall erred on SMS tax
Finance Minister Goodall Gondwe’s announcement that the excise duty on text messaging and Internet data was effective midnight of the day he presented his budget statement on May 29, was an error that forced operators to raise tariffs immediately, Nation On Sunday understands.
The Malawi Revenue Authority (MRA) has since written operators who increased the tariffs to suspend the increase while the Finance Minister has since said there is no cause to panic as he plans to meet stakeholders on the matter tomorrow.
Authorities have confirmed that the newly-introduced tax, which is domestic, is supposed to be implemented by July 1 2015 after all necessary bills are passed (as they are or after some amendments) in the National Assembly.
May 29 was a Friday, but by weekend of that week, two mobile phone operators—Airtel and TNM—had implemented the 10 percent excise duty on text messaging and Internet data, a month ahead of its implementation.
The tariffs of the two mobile phone companies, whose excise duty on usage was only imposed on voice services, went up, causing an outcry among their subscribers.
Malawians pay the highest tariffs to access communication services in the region, according to the International Telecommunications Union (ITU) December 2014 report.
But in a week that followed, Nation on Sunday has established, MRA wrote the two mobile phone companies, advising them not to immediately implement the collection of excise duty on text messaging and Internet data until July 1 2015.
MRA spokesperson Steven Kapoloma, in a response to a questionnaire on Thursday, explained that the implementation of this new tax is effective July 1 2015.
Kapoloma, who is deputy director of corporate affairs, admitted MRA has communicated to Airtel and TNM, advising them not to implement the newly introduced tax on text messaging and Internet data.
Kapoloma, said: “The reason is that this measure is different from import excise. Although both fall under Customs and Excise Act, all tariff changes are effective midnight after the Minister of Finance presents the budget in Parliament while the rest of other tax measures are effective from July 1 once necessary bills are passed by the National Assembly.”
He explained in an earlier interview that domestic taxes await amendments of the Act.
Gondwe, asked to react to MRA’s position that the new tax is supposed to be implemented by July 1 2015 and if that has been brought to his attention, said he has not been approached on the matter by anyone.
“But they will come to me on Monday, we will sort it out. It is not a big problem,” he said.
Airtel public relations manager Edith Tsilizani, in a response to a questionnaire, confirmed that MRA wrote her company, advising them to reverse the decision on tariff adjustment while TNM head of marketing Sobhuza Ngwenya yesterday also admitted receiving a letter from MRA dated June 3 2015, advising them not to implement the new tax.
Ngwenya said TNM, after the communication from MRA, suspended the adjustment and will only be implemented by July 1 2015.
