In a report, the company said according to Tanzania Communication Regulatory Authority, the telco has as of March this had 15 million subscribers accounting for 32 percent of the market share. The local market has over 48 million subscribers.
“M-Pesa, Vodacom’s mobile money product is also a leading brand with mobile money customer market share of 39.3 percent,” the report stated adding that Vodacom is the only mobile operator to comply with the Tanzania’s Electronic and Postal Communications Act of 2010 which requires telcos to list 25 percent of their shares on Dar es Salaam Stock Exchange.
The listing in 2017 allowed more than 40,000 Tanzanians to own shares in the telco and share its profits. The listing also provides the much-needed transparency, both in terms of business and taxes. Vodacom is a major investor, taxpayer, employer, and purchaser of local goods and services contributing to real value creation in Tanzania,” the report added.
During the past eight years, the Dar es Salaam based telco has been growing at an impressive average of eight per cent with annual tax contribution reaching 435bn/- this year. Among the taxes and fees which Vodacom pays Tanzania Revenue Authority, local government authorities, regulators, social security funds and telecom fund.
“The most familiar ones are valued added tax, corporate income tax, excise duty, import duty, service levy, property tax, advertisement tax, stamp duty, skills development levy, gaming tax, withholding tax and pay as you earn. These are payable to TRA,” the report added.
The telco also contributes both to Workers Compensation Fund (WCF) and National Social Security Fund(NSSF); business license fee and service levy are payable to the LGAs and several regulatory fees and taxes.
“The universal service levy is paid to the Universal Communications Services Access Fund; regulatory fee (royalty), numbering fee, license fee and frequency fees are paid to TCRA. In addition, license fees such as the e-payment system and the e-money issuer to Bank of Tanzania and different business license fees to LGAs,” the report noted.
In a breakdown, the telco said it paid 221bn/- in corporate income tax; 525bn/- in VAT; 614bn/- in excise duty; 96.8bn/- in payroll taxes in the past five years. “VAT is a broad-based consumption tax that is payable monthly. Hence all mobile services are essentially subject to VAT at a standard rate of 18 percent. If the value of airtime is 100 shillings, VAT of 21 shillings will be payable,” the report explained.
“Unlike VAT, excise duty is a narrow-based consumption tax. Also payable monthly. Mobile money services are subject to 10 percent excise duty. All other mobile services to final consumers are subject to 17 percent excise duty, making telecommunication in Tanzania one of the highly taxed industry in Africa,” the report pointed out.
“Pay-As-You-Earn is deducted from employees’ salaries and paid to TRA by the employer. Various rates, from 0 to 30 percent apply progressively. SDL at 4.5 per cent of the cost of employment is payable by the employer. The employer is also obliged to contribute 1 percent of the employment cost to WCF. The employer is also obliged to contribute 20 percent of employees’ salaries to the social security fund, i.e. NSSF for the private sector,” the telco’s report stated.