Another cogitation on punitive taxes imposed on mobile networks

Posted on November 10, 2017  /  0 Comments

As I was thinking about how to explain the silliness of charging LKR 200,000 (USD 1,300) per antenna tower per month as proposed by Sri Lanka’s 2018 Budget, I came across this piece on how African governments were shooting themselves in the foot by following the Willie Sutton doctrine:

Unfortunately, instead of seizing such opportunities, many African governments are energetically discouraging the spread of technology. Many ban genetically modified crops, refusing even to accept them as food aid when their people are starving. Almost all invest far too little in science and research, and have byzantine visa systems that discourage skilled immigration. And they tax mobile phone and internet companies at punitive rates. In 2015 mobile-phone operators in 12 African countries paid taxes and other fees equivalent to 35% of their turnover, says the GSMA, an industry lobby. In the Democratic Republic of Congo, which has one of the lowest rates of phone penetration in the world, taxes on mobile operators made up 17% of government revenues.

African taxmen pick on phone companies because they make lots of money and keep excellent records in a continent where both these things are rare.

I am debating what the reaction would be when I use examples from Sub-Saharan Africa in a policy debate in Sri Lanka.

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