Internet Firms Oppose Hike On Service Tax in Tanzania


Internet service providers in Tanzania have raised concern over the newly introduced 14.5 per cent excise duty on internet services, saying the new tax will inflate the internet costs in the country.

The providers, in their statement in Dar es Salaam over the weekend, said the new duty would render internet services unaffordable to many and negate the gains made so far on internet and data penetration.

"Implementation of the imposed duty will automatically slow down our members' ability to roll out internet services in rural areas... internet development especially in the rural areas would be adversely impacted," a statement by Tanzania Internet Service Providers Association (TIPSA) read.

Internet penetration in Tanzania has experienced a dramatic surge in the recent years. According to the Director General of the Tanzania Communications Regulatory Authority (TCRA) Prof John Nkoma, the number of Tanzanians using the service has grown from 4.3 million in 2010 to six million this year.

Prof Nkoma gave the figure in May this year in his address to a forum during the commemoration of World Telecommunication and Information Society Day. But, the internet providers say that the new tax would reverse the gains in the internet penetration and would be counterproductive to efforts to bridge the digital divide in the country.

"It is our belief that this new imposed excise duty will widen the digital divide, defeating the purpose of nationwide reach, to champion and create initiatives for internet access expansion in the uneconomic areas by TISPA.

We urge the government to heed to our plea so that we can achieve our ICT4Development goals," the association said. TISPA is a non-profit association that strives to bring together the Internet community to collectively make the Internet accessible to as many people as possible by encouraging continued investment in the sector.