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Call for Scrapping of Value Added Tax on Prepaid Mobile Communications Services

Following the move by the Government of Namibia to scrap value added tax of 15% on food imports, MISA Namibia has taken the opportunity to urge the government to further extend the scrapping of VAT to mobile prepaid services that was imposed in February 2008. "Access to communication, like food, is a basic and fundamental human right," says Mathew Haikali, MISA-Namibia's Director.

Welcoming and commending the government for scrapping the tax on food and urging the same on the communications sector, MISA-Namibia, says Namibia's Vision 2030 acknowledges the role of information communication technologies, ICTs, in human and economic development. In the 2001 Declaration on Information and Communications Technology of which Namibia is a signatory, SADC countries undertook to ensure that ICTs do not further widen the disparities between the rich and the poor, men and women, as well as urban and rural populations.

Furthermore, the United Nations Millennium Development Goals, which have also been embraced by Namibia, call for the availing of information and communication technologies as a strategy for development.

The imposition of VAT on telecommunications services however places further obstacles to universal access to communication and is clearly not in the spirit of Vision 2030, the SADC ICT Declaration and the Millennium Development Goals.

"The extra cost of telecommunications services is no doubt most felt by the poor and other marginalized sections of society who are already struggling to make ends meet due to the escalating cost of living in Namibia", says Haikali, MISA-Namibia Director.

Studies around the world have shown that information communication technologies; the Internet, mobile phones and email have facilitated economic and social development at individual and national levels. Such growth should be encouraged and must not be constrained by barriers posed by taxation on access and usage. Although Namibia like the rest of Africa has witnessed considerable growth in mobile phone connectivity, over 90 per cent of the population remains excluded from the benefits of ICTs.

"The current tax regime on prepaid mobile services is seriously constraining affordability and access to communication for the average Namibian user", says Haikali.

MISA Namibia calls upon the government to scrap the Value Added Tax. Hiking the price of telecommunication services will only place Namibians on the wrong side of the digital divide for a long time to come. Government has a moral obligation to promote and facilitate universal and cheaper access to communication.

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Rashweat Mukundu: Programme Specialist: Media Freedom Monitoring
Media Institute of Southern Africa (MISA)
Private Bag 13386
Windhoek
Namibia
Tel: +264 61 232975
Tel: +264 61 248016
rashweat@misa.org <mailto:rashweat@misa.org> , misaalerts@gmail.com

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