Emmerson Njanjamangezi, Group Features Editor 
DIVERSIFIED telecommunications group, Econet Wireless Zimbabwe (Econet) says the high taxes levied on the telecoms sector continue to pile pressure on the group’s margins, curtailing network expansion projects.
In a statement accompanying financial results for the year ended February 28, 2022, Econet chairman James Myers said the industry is currently subject to 10 percent excise duties on revenue. This is over and above the 14,5 percent Value Added Tax as well as other regulatory levies and taxes of 3,5 percent, bringing the total taxes on each dollar of revenue to approximately 28 percent.
“During the period under review, the Postal and Telecommunications Regulatory Authority of Zimbabwe (Potraz) installed a system on our sites which, according to the TTMS regulations (SI 95 of 2021), is aimed at combating network fraud and addressing billing integrity issues.
“The system attracts an additional tax of US 6 cents per minute on international incoming traffic, payable in foreign currency. This increases the taxes that are levied on the telecommunications sector, specifically.
“These taxes are prior to the allocation of any operating costs applied in the determination of the company’s liability for income taxes. These taxes are generally higher than the African average and have the impact of increasing connectivity costs for consumers.”
Despite facing significant cost pressures in an inflationary environment due to infrequent tariff reviews, Myers said the company achieved a number of key milestones and made significant progress in improving its operational processes for greater efficiency and effectiveness.
“In line with our commitment to enhancing digitalisation, Econet launched the first 5G network in Zimbabwe reaching throughputs of up to 20 times higher than 4G… We rolled out network upgrades to improve our customer carrying capacity.
“These upgrades included the deployment of 10 greenfield base stations, and upgrading 100 sites across the country, from 3G to 4G, as part of our efforts to increase the 4G network coverage,” he said.
Although these upgrades were in line with Econet’s continuing process to digitalise its network, Myers further said they were far less than what is required to achieve set objectives.
“We are limited in our ability to meet network upgrade requirements due to continuing issues related to accessing foreign currency to maintain the necessary capex investment to appropriately grow the network,” Myers further said.
newsdesk@fingaz.co.zw
