Inbound international call taxes threaten African enterprises

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New telecoms levies on inbound international calls in some African countries are making it increasingly difficult for enterprises to conduct international businesses. A spate of new taxes on such calls has seen charges increase by between 20% and 100%.

Such taxation, reportedly in contravention of the Melbourne Convention, was first introduced last year in Cote d'Ivoire. That tax resulted in an increase in the cost of terminated calls of 0.03 eurocents per minute, an increase of 20% in the cost of terminated and transited calls. Ivorian employers' organisation UNETEL, successfully fought a campaign to have the tax suspended by presidential order but other countries have now launched similar taxes.

In Gabon, for example, the Ministry of Communication, Post, Telecoms and ICT has specified that operators must pay taxation at US$0.15 per minute  to the regulator, Artel. That tax represents a 52.5% increase in the wholesale termination price of calls to Gabon.

Ghana is also keen to access revenues from this type of taxation. The country's press agency, GNA, has reported that Haruna Iddrisu, minister of communications, reckons that taxation of inbound calls, if "done well", could raise and additional US$50m each year. One report estimated that the wholesale price of termination of a call to Ghana could rise from US8 to 9 cents to US19 cents a minute and increase of more than 100%.

While this kind of tax has obvious advantages in the short-term for governments eager to generate additional income, it is far from money for nothing. Gabriel Solomon, senior vice president of the GSM Association has commented that such taxation is; "A short term measure to generate cash... that will have a very negative impact on that country's competitiveness and lower the amount of foreign direct investment."

Let's hope countries considering this taxation follow Cote d'Ivoire's example and hang up on such counter-productive moves.