KENYAN PHONE FIRMS WANT TAX CUTS FOR WIDER REACH

Telecoms

Mobile telephone companies, Safaricom and Celtel are asking the Government to reduce taxes to enable them offer cheaper calling rates and tap the rural market.

The two competitors are unanimous that local cost of communication was higher compared to the regional rates.

Safaricom chief executive officer, Michael Joseph and his Celtel counterpart, David Murray said attempts to offer low peak-hour calling rates have been thwarted by the taxes, pushing up the cost of doing business. "Let the Government reduce the rates either to five or 10 per cent to make us make up for losses on revenue," said Joseph.

Currently, a 10 per cent excise duty is charged on airtime while the Value Added Tax is at 16 per cent.

It would prove difficult, said Joseph, to achieve the goals of bringing ICT to the rural areas while the communication costs are headed to the roof. "We in the mobile telephony field feel that we have made important strides in bringing ICT to the rural areas, but of course there is a lot more to be done."They were speaking during the official opening of an ICT development expo in Nairobi on Wednesday.

The East African Standard