(Ecofin Agency) - Tanzanian authorities announced they are waiving the value-added tax on smartphones, tablets, and modems as part of a plan to bring broadband penetration to 80% from 38% by 2025. In addition to affordable data packages, the government wants to make device prices affordable to the population.
When defending the 2021-2022 draft budget before the parliament last June 10, the Finance Minister, Mwigulu Nchemba (pictured), said improving connectivity is crucial for human and socio-economic development. The day before this decision was announced, Hisham Hendi, CEO of Vodacom Tanzania said “if the government can reduce or remove it completely it will help more customers afford smartphones, meaning more people will be able to have access to data. If we can sort out these main points for the industry and the consumer, I think the future will be positive for our industry.”
As a reminder, telecom operators have been discussing some relief points, including waiving the VAT, with the government since December last year. For the Tanzanian government, which has struggled over the years to make the average gigabit per second (GB) rate affordable enough, the drop in the price of smartphones, tablets, and modems will promote digital inclusion and boost the digital economy. Tanzania is the fifth cheapest country in Africa with the average GB rate at $0.75 according to Cable.co.uk’s "Worldwide mobile data pricing 2021: The cost of 1GB of mobile data in 230 countries" report.