GSM Providers Differ on Increment on Calls Rate at Legislative Hearing

Monrovia – The two leading telecommunication operators in Liberia have given contrary views on a proposal by the Government of Liberia through the Ministry of Finance and Development Planning and the Liberia Revenue Authority to increase taxes on GSM companies by US$0.01 per minute.

Report by: Henry Karmo – [email protected]

Lonestar Cell and Cellcom, in separate remarks, gave contrasting views on the proposed increment, cautioning the government to do a proper study on the market.

LoneStarCell Deputy CEO, Louis Roberts, warned on Monday at a public hearing conducted by the joint Ways, Means and Finance Committee on the draft Liberia Tax Amendment of 2016, that if the tariff is added, it would be the company shouldering the burden, not ordinary Liberians.

Going contrary, Cellcom vice president for government and regulatory affairs, William Saamoi, said increasing the tariff means a lot of people in Liberia would not be able to afford to make a call as cell phone companies carry the burden of navigating difficult terrains, operating generators etc.

“We lower the tariff, increase the volume—let the people call, let the businesses generate revenue, let the government make money. You do that today, lot of places where we have low tariff, people will not be able to call and as a business entity, if people cannot call and we cannot make profit, we will shut down our operation in those places and remove our sites to those places we can make profit. From then, you have disenfranchised your people by denying them their fundamental rights to communicate,” he told the hearing.

“So we think we should keep the rate as it is, encouraging us operators to invest more into less populated areas so that the people can communicate.” He further warned that additional tax is a double taxation on consumers.

The draft bill

The draft Liberia Tax Amendments Act of 2016, among many things, will include Goods and Services Tax: Amendments to section 1000(b) and Section 1021(b) (tax rate) and 1022 (definitions). The rate of tax is 10 percent of the taxable amount described in section 1025 with exception. Additional 5 percent surtax applies to telecommunications services specified in section 1022 (a) (2).

The amendment is also taking into consideration excise on Tobacco: Amendments to section 1121, Tobacco and Tobacco products. The amendment is proposing excise tax at the rate of 80% of the amount determined under subsection (a) shall be levied on tobacco  and on any product containing tobacco, including cigarettes, cigars, snuff, chewing tobacco, and similar products, whether imported to or manufactured in Liberia.

On the amendment of taxes on alcoholic beverages, water and soft drinks, excise tax at a rate of (45) percent shall be levied on all beverages with alcohol content in excess of one percent, including beer, wine, stout, ale, gin, whisky, bourbon, and other products intended for consumption by mouth that have the requisite alcohol content, whether imported or produced in Liberia, but not including pharmaceutical products or medicinal preparations if certified by the pharmacy board.