Taxation and the growth of mobile in East Africa 2009
The impact that mobile communications is having on economic and social development in East Africa is akin to that of other major enabling infrastructure like roads, ports and railways. All stimulate trade, create jobs, generate wealth and enhance social welfare. Mobile communications, in particular, is making a profound impact by:
- delivering universal access - mobile networks cover the vast majority of East African citizens, and operators are investing substantial amounts in further network roll out;
- delivering universal services - mobile phones account for around 95% of all telecoms connections in East Africa; and
- boosting GDP - recent analysis by Deloitte shows that a 10% increase in mobile penetration leads to a 1.2% increase in GDP in the long-run across developing countries.
Despite the positive impact of mobile communications, East African community member states impose a sector specific tax on mobile usage impacts upon poorer consumers relatively harder. The excise duty also restricts the affordability of mobile services for many millions of East Africans. Globally only a small minority of countries, around 17 in total , impose mobile-specific taxes. In Africa eight countries do so, and a substantial number of these are located in the East African community.
In 2009 the GSMA commissioned Deloitte to update its previous study “The economic impact and taxation of mobile telecommunications in East Africa (2007)”. The new report updates the quantification of the economic impact that the mobile industry has in each of the East Africa Community member states: Kenya; Rwanda; Tanzania and Uganda. It also assesses the taxation structure on the respective mobile industry and analyses the effects that lowering excise duties can have on the mobile industry and also government tax receipts.
To download a copy of the report, please complete the form below:
The GSMA would like to thank the following who have assisted us with this report and with the original report: MTN; Safaricom; Vodacom; Warid; Zain; Ericsson; Nokia; Nokia Siemens Networks; Kenyan Telecommunications Regulatory Authority; Tanzanian Telecommunications Regulatory Authority; and Ugandan Telecommunications Regulatory Authority.
