Zambia - Taxes on telecommunications equipment worry Zain director

[post zambia] Taxes attracted by the telecommunications equipment and services have continued to be the main hindrance in infrastructure development, Zain Zambia managing director David Holliday has disclosed.

Appearing before the parliamentary committee on communications, transport, works and supply yesterday, Holliday said the high taxes on equipment had stagnated the telecommunications sector, particularly in rural areas.

“The taxes attracted by the telecommunications equipment and services remain a major hindrance in the deployment of costly infrastructure particularly for rural areas and certain economically depressed areas,” he said.

Holliday told the committee that the telecommunications sector has been negatively impacted through the absence of short and long term tax incentives.

“The telecoms sector is negatively impacted between 31 per cent and 35 per cent in total being taxes on revenue as contribution to the state treasury,” he said.

Holliday suggested that taxes charged on renewable energy tools such as solar equipment which is vital for sector development in rural areas should be removed for a considerable time.

He also noted that the lack of an integrated licensing regime had increased the cost of telecommunication service expansion.

Holliday said rural areas in the country had great potential which remained unexploited.

“The potential for rural connectivity which spurs infrastructure development is vast and remains unexploited in Zambia. Our shortcomings in fully meeting these targeted areas for telephony universality need a quick rethought beyond projects and programmes on rural connectivity,” said Holliday.

Taxes on telecommunications equipment worry Zain director