After a controversial tax reform in the telecom sector, the Zimbabwean government announced the introduction of a new levy on imported mobile phones.

The government will apply a $50 levy on imported mobile phones, according to the 2022 national budget presented last November 25 by the finance minister Mthuli Ncube (pictured).

Speaking to MPs, the minister explained that although “imported cellular telephone 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” at the country’s ports of entry.

“I propose to introduce a levy of $50 which will be collected prior to registration of new cellular handsets by Mobile Network Providers. However, where duty would have been paid, the Zimbabwe Revenue Authority will provide a refund of the levy, within 30 days of receipt of payment from the mobile network operator,” the official said.

Details of how the new tax will be collected have not yet been determined. They should be if the tax is approved by Parliament. As a reminder, the government has already introduced a 5% excise duty on communication credit recharge cards, 25% customs duty on imported mobile phones, and 2% tax on electronic financial transactions.

Mthuli Ncube says the Zimbabwean economy is expected to grow by 5.5% in 2022, supported by higher output in the mining, manufacturing, agriculture, construction, and accommodation and food services (tourism) sectors. This 2022 growth projection is, however, subject to risks related to the future evolution of the pandemic and its impact on key sectors of the economy.

Total revenue collection is projected at Z$850.7 billion ($2.3 billion) (16.8% of GDP) next year. On the other hand, expenditures are projected at Z$927.3 billion (18.3% of GDP). Total current expenditure will account for 13.4% of GDP, while investment programs will account for 5% of GDP. Wage costs will be contained at about 6.7% of GDP or 36.7% of revenue.

Consumers denounced this new tax, which they consider a threat to mobile penetration in the country. The rate was 87.8% in the first quarter of 2021.

Muriel Edjo