Zimbabwe imposes a US$50 tax on mobile handsets

  • This will now be a requirement before registering new mobile handsets
  • Collection to be done before registration of new cellular handsets by Mobile Network Providers.
  • Zimbabwe already levies a 25% tax on new, imported smartphones.

The Zimbabwean finance minister, Mthuli Ncube, proposed to impose a further US$50 tax on new mobile handsets. The government is taking every chance to collect as much revenue from businesses and the people. Zimbabwe currently has a reduced tax base, thanks to the almost 95% unofficial unemployment rate.

However, the official unemployment rate in the country is 5.73%.

Presenting the 2022 proposed budget statement, the finance minister said, “Whereas imported cellular handsets attract modest customs duty of 25%, the funds realized, however, point to evasion of the customs duty due to the nature of the items which can easily be concealed,” he said.

“To curb tax evasion, I propose to introduce a levy of US$50 which will be collected before registration of new cellular handsets by Mobile Network Providers.” He added.

This measure puzzled many. This was because Zimbabweans already pay a 2% tax for all electronic money transfers. Therefore, this is another ploy to collect more money from them – only that this time it is through mobile network providers.

To avoid double taxation, he said that those who would have paid duty on new cellphone handsets would be refunded their US$50 by the Zimbabwe Revenue Authority (ZIMRA) within 30 days of receipt of payment from the mobile operator.

But this measure may prove to be just another headache for mobile network providers, given the government’s reluctance to pay back money owed to suppliers, investors, and businesses, especially if it is in foreign currency.

Other African countries such as Ghana also use network providers to collect tax revenue. This new trend results from the increasing number of people who are accessing the internet across the continent. However, cellphone providers criticize this move as it hinders the fast adoption of digital services.

Governments should develop other innovative ways to increase tax revenue collection, for example, supporting small businesses that can potentially employ tens of thousands more people, hence enlarging the tax base.