Nokia is lobbying various African governments to either get rid of, or lessen value-added tax (VAT) on mobile phones - again.
Tania Steenkamp, communications manager at Nokia SA, says the action targets particular African markets.
“Where there is a high percentage of grey products filtering into the countries, Nokia works with and lobbies local governments in these markets to reduce taxes and duties on imported electronics to counteract the influx of grey products.”
Kenya is one country in which the handset manufacturer is gearing up to lobby. The country imposes 16% VAT on mobile phone handsets and an extra 3% customs and duty charges, making it nearly 19% tax on mobile phones.
The company believes the scrapping of VAT could potentially lead to growth in lobby markets. “An example of this is the recent zero-rating of mobile phones in Ghana in terms of import duties and taxes. This has led to a boom in the market and is benefiting consumers in terms of now having access to original products destined for the country, which gives them a warranty on the device.”
Other mobile operators on the continent have also revealed plans to lobby for the reduction of tax on airtime. In a statement, Safaricom CE Michael Joseph revealed plans to lobby for tax reductions.
“This association of about 10 operators will try to put together a massive lobbying effort, not only with governments... what we will do now is broaden our initiative by lobbying members of Parliament and the masses so that we get better results,” he said.
Steenkamp explains that no lobbying will take place in SA, as the company feels there is no need for it. “We do not have these issues in SA; the market is structured and managed very well in terms of imports.”
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