‘Negative Impact’: Presidential Candidate Eyes Ban on Free Calls Offered by GSM Companies
Monrovia – Presidential candidate Mr. Benoni Urey of the All Liberia Party says free calls to the U.S. and other countries are gravely impacting revenue generation for Liberia.
In a letter addressed to President Ellen Johnson Sirleaf obtained by FrontPageAfrica, Mr. Urey, who is also the Chairman of Lonestar/MTN, informed the President that “the long running and unending promotions, as well as the various freebees, i.e. ”free calls to the USA; $1.00 for 3 days or $1 for 5 days; the free data services; 3GB for $5 for a month; etc.” are negatively impacting revenue generation to the Government of Liberia, the Liberia Telecommunications Authority and Liberian GSM companies.”
The Lonestar Chairman further wrote in the letter dated March 14, 2016, “Madame President, the loss of revenue to GOL has increased year on year and is expected to even grow higher if these promotions are not curtailed and the market stabilized…in view of the above, I pray your indulgence for consideration in addressing these issues.“
In making his case, Mr. Urey attached an analysis prepared by Lonestar which claimed a loss to the Government of $22 million from telecom promotions.
FrontPageAfrica has leanred that based upon the urging of the Lonestar Chairman and ALP Presidential Candidate, and the President’s meeting with the Commissioners of the LTA, the Government submitted a bill to the National Legislature to amend the Revenue Law dated May 16, 2016. The bill imposes an excise tax of 1 cent US on each minute of call made over the GSM networks. This would be in addition to the 15% GST already being collected from the GSM companies. If the GSM service providers have to pay one cent for each call minute, there would be no way to offer free calls to their customers. This would end all the free promotions that many Liberians depend upon every day to communicate with family, friends, and business associates.
FrontPageAfrica has also learned that Dr. Edward B. McClain, Jr., the Minister of State for Presidential Affairs directed Chairman Urey’s letter to the Liberia Telecommunication Authority (LTA) indicating that the letter would be discussed during a meeting with the President and the Commissioners of LTA.
Industry observers say curbing free calls hurt the consumer market because government intervention in the free market would undermine competition and lead to higher tariffs and hurt Lonestar competitors and consumers.
The International Monetary Fund (IMF) has in recent years made many interventions in Liberia to avoid policies that tend to undermine the free market.
But an industry expert has argued that it would be naïve of the government to expect to increase taxes by imposing an excise tax simply because people would adopt, make less calls, and use apps such as WhatsApp, Viper, Facebook Messenger, and FaceTime to make free calls and send messages. In fact, the government may end up losing revenue if users decide that traditional mobile calls and SMS are too costly.