Liberian Gov’t Starts US$0.1 Per Minute Tax on Phone Calls
Monrovia – The popular dial *143# to grant GSM subscribers ‘free’ intra network calls maybe no more as the taxation on calls took effect on Sunday, January 15, 2017, FrontPage Africa has learnt.
Report by Lennart Dodoo- [email protected]
The Liberia Telecommunications Authority (LTA) in a communication addressed to GSM Companies operating in Liberia informed the companies of the coming into effect Section 1165 of the Amended Revenue Code which was recently passed by an act legislature, signed into law and subsequently printed into handbills.
“The Minister of Finance and Development Planning has authorized the LTA to proceed with enforcement of this new Section 1165 which we will do through billing and invoicing the revenues generated from this tax.”
“To this end you are hereby notified that effective immediately and commencing no later than 15 January 2017 telephone services providers shall begin collecting the new excise tax of US$0.01 on all domestic voice calls,” the LTA penned in its communication to GSM Companies.
The LTA also mandated GSM companies to “beginning February 5, 2017, service providers shall provide to the LTA a copy of all record details (CRDs) covering all domestic voice traffic.
In the event that the prevailing circumstances require the LTA to receive CDRs on a more frequent basis, service providers would be obliged to provide said data within time frame specified by the LTA”.
A source at Cellcom GSM Company told FrontPageAfrica that recent taxation by the Legislature means that they might likely discontinue the US$1 for three days call offer which is popular amongst Liberians and foreigners alike.
Section 1165 which was recently inserted in the Revenue Code during the special session of the legislature requested by President Ellen Johnson Sirleaf purposely for tax code amendments proposed by the Liberia Revenue Authority (LRA) and the Ministry of Finance Development Planning (MFDP).
The amendments in the revenue code become an option when it became obvious that government could not raise up to US$ 46 million of FY2016/17 Budget from its traditional sources of revenue owing to the decline of prices of the country’s major export commodities.
When the bill first appeared at the Legislature, group under the banner Association of Telecom Consumers petitioned the Legislature, requesting the body to reject the proposal.
In their petition, the group stressed that taxation on calls per minute would directly affect low income earners who are already struggling to cope with prevailing economic situation.
They claimed that such decision would make access to information and communication technology very expensive for low income earners.
The petitioners stated: “This will result in a double taxation for consumers who are already paying 15% GST on the sale cost of scratch cards.”
The group claimed to be representing citizens from the 15 political subdivision of Liberia which includes marketers, telecom consumers, low income earners, doctors, and students.
Natelco requested the legislature to see reasons and declare the proposal counterproductive, because its adoption would affect the long term national digital strategy objectives set by the government of Liberia.
“Natelco is therefore requesting that you invite all service providers, the LTA, Ministry of Post and Telecommunication, cable consortium of Liberia and all other providing voice calls, data or other ICT related services to quickly address issues of internet connectivity, fiber optic cable and the high cost of interconnectivity,” said the petitioners in a statement.
The National Association of Telecom Consumers is a Civil Society Organization serving as a watch-dog institution for consumers interest with the objective of seeking redress for consumers’ complaints, promote responsible and sustainable consumption among telecom-consumers, educate consumers on their rights and responsibilities, provide a channel for consumers’ opinion and representation and foster understanding among consumers.
According to an industry expert – “The whole premise of the Government is faulty. The assumptions for the tax increase are that revenue will increase with increase in taxes. There is nothing farther than the truth. Increase taxes will mean higher cost to the consumers, who have a limited purchasing capacity.
Essentially, consumers will call less to adapt to the increase in cost.
As for international calls, most consumers are now using such apps as WhatsApp, Viper, and Facetime to make their international calls.
With the increase in the cost of international calls, one can expect an increase in the use of such free apps which would surely negatively impact sales and revenue. Lastly, it is illegal and preposterous to expect to collect taxes where there are no sales, thus no revenue or income.”
Other targets for taxation include alcoholic beverages and tobacco products.
However, concern has been raised that the proposed increase in taxes on alcoholic beverages is unfair because the same increase is proposed for both imported and locally produced products. One case in point is the local brewery that produces beer.