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- Zimbabwe will levy a new $50 tax on imported smartphones only where it cannot be proven that an existing 25% duty has not been paid.
- Finance minister Mthuli Ncube says the tax is an "enforcement mechanism".
- But critics say the levy will slow down digital transformation.
Zimbabwe will levy a controversial new $50 (R810) tax on imported smartphones - but only where it cannot be proven that an existing 25% duty has not been paid, Finance Minister Mthuli Ncube has said.
The 2022 budget statement tabled in parliament last month introduced the new levy, sparking a massive outcry from parliamentarians and mobile telecom industry players.
Now Ncube - who also slapped further taxes on energy drinks and dairy imports to broaden government revenues - has softened the government's stance on the importation of smartphones.
This comes at a time mobile internet has boosted Zimbabwe’s internet penetration, helping bridge education and banking during the Covid-19 pandemic.
"What we are trying to do is to design a mechanism that can enforce the payment of the 25% duty, hence this 50% levy. It is only payable if you cannot prove that you have paid the 25% duty," Ncube said in response to questions from the country’s upper house senate on Tuesday.
He added: "So it is not a duty, it is an enforcement mechanism."
Initially, the Zimbabwean treasury chief had said those who would have paid import duty for smartphones would pay the new levy and get reimbursed on providing proof of duty payment.
"The issue on phones is not duty," he said.
Most mobile gadgets in use in Zimbabwe are imported from South Africa, China and Dubai, among other source markets. Some parliamentarians had said they would not pass the 2022 budget, which targets a 5.5% economic growth.
This was because of the smaller nature of mobile phones, which means that people are able to "put them in your pocket or wherever in your handbag and you pass through the border" with "no duty paid", he said.
Mobile companies such as Econet and state-owned NetOne have now been designated as collection agents for the $50 levy on smartphones imported into the country without paying relevant duties through a "registration" mechanism.
Farai Rungava, a data science student, wrote on Twitter recently that Zimbabwe had essentially "added another hindrance to access internet on top of expensive data and poor network coverage" with the new $50 levy on imported smartphones.
"How can Zimbabwe have successful tech start-ups and fully embrace digital transformation when the government is putting hefty tax on purchasing phones, a basic product needed to interact with the internet," said Farai Rungava, a data science student.
The government already imposes other taxes on airtime and data top-ups and has a 2% tax on all financial transactions undertaken through mobile money and electronic payments platforms.
