Burkina Faso to impose new tax on telecoms revenues

Mergers, Acquisitions and Financial Results

A new tax on telecoms companies operating in Burkina Faso has been introduced by the country’s Finance Act 2014, in a move that is expected to generate around XOF12 billion (USD25 million) for state coffers.

Jeune Afrique cites an announcement by Minister of Economy and Finance, Lucien Marie Noel Bembamba, as saying that a 5% tax will be imposed on the annual turnover of telecoms companies including Office National des Telecommunications (Onatel), Indian-owned Airtel Burkina Faso and Telecel Faso.

Demand for telecoms services in the landlocked West African nation is growing rapidly, but wireless penetration still remains lower than the regional average, notes TeleGeography’s GlobalComms Database. At the end of September 2013 there were approximately 11.187 million wireless subscribers (up 17.7% from 9.503 million a year earlier), corresponding to a population penetration of roughly 63%, which is roughly ten percentage points behind the African average.