Safaricom CEO Bob Collymore says the 30 per cent tax on cross-border call charges makes it impossible for operators in Kenya and Rwanda to go ahead with the planned downward revision in tariffs. PHOTO | FILE |
What you need to know:
The Rwanda government is said to have imposed a 30 per cent tax on the Sh8.8 ($0.10) maximum calling rate agreed upon by East African Community member States.
The move by Rwanda to renege on this agreement is said to have arisen from fears that a firm the government had contracted to monitor all international incoming calls would lose business if the levies are scrapped.
The Rwandese government has imposed a 30 per cent tax on cross-border call charges in what appears to be backtracking on a promise made to scrap levies on roaming subscribers in the region.
This has led Safaricom to announce a reversal to Sh25 per minute roaming charges, a day after the telco had announced a 60 per cent cut in call rates to Sh10 per minute.
The Rwanda government is said to have imposed a 30 per cent tax on the Sh8.8 ($0.10) maximum calling rate agreed upon by East African Community member States.
“This new development makes it impossible for operators in Kenya and Rwanda to go ahead with the planned downward revision in tariffs. We will, therefore, revert to the previous tariffs even as we push on with efforts to ensure that we have affordable calling rates for the region”, Bob Collymore, Safaricom CEO, said.
The move by Rwanda to renege on this agreement is said to have arisen from fears that a firm the government had contracted to monitor all international incoming calls would lose business if the levies are scrapped.
Kenya is strongly opposed to such levies, arguing that they neither benefit the governments nor the citizen, but the few individuals who own such companies and that they stifle business growth and regional integration.
ICT Secretary Fred Matiang’i, who happened to be on official duties in Rwanda, was Thursday said to have held discussions with the Rwanda government to review the latest standing.
On Tuesday Safaricom announced that its customers making international calls from Kenya to Rwanda, and vice versa, would be billed at a rate of Sh10 per min beginning October 1.
Mobile phone subscribers visiting Rwanda were also to receive calls for free. Safaricom’s customers visiting Kigali would make calls to local Rwandan networks at Sh10, from Sh17.50 per minute.
Kenya is the only East Africa state that does not levy any taxes on cross-border calls and has been at the forefront of pushing for a common termination tariff in an effort to reduce the cost of doing business and to encourage regional integration.
The Safaricom CEO said the firm has entered into discussions with the Ministry of Information and Communications and the Communications Authority of Kenya seeking a revision of the position taken by Rwanda.
“We remain committed to the effective implementation of One Network Area initiative by the East African Community Heads of State, which envisages the reduction of international and roaming tariffs reduced to lower costs of doing business and deepen social integration in the region,” Mr Collymore added.
Uganda levies Sh7 levy on inbound calls from Kenya, Tanzania charges Sh10, while Burundi charges Sh13 as levy. This means any calls made by a Kenyan when roaming or directly calling from the country are subjected to the taxes.
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