Sub-Saharan African countries' mobile-specific taxation strategies were deterring mobile investment and driving up costs for consumers, an international mobile trade organisation said on Thursday.

GSM Association (GSMA) described the sub-Saharan Africa mobile-specific taxation strategies implemented by governments in the region as short sighted, and urged countries to remove mobile-specific taxes.

Sub-Saharan Africa countries would attract mobile investment of up to $98-billion between 2000 and 2012, GSMA stated, but added that an additional $13-billion could be invested over the next seven years if governments were to lower regulatory risk and remove mobile-specific taxes.

Speaking at a briefing in Johannesburg, GSMA senior vice president Gabriel Solomon said that the association was convinced that it was no longer warranted to tax mobile-related equipment as a luxury item, but rather as a necessity.

He added that the mobile industry would generate about $71-billion in tax revenues in sub-Saharan Africa between 2000 and 2012 but that this figure could be higher if governments were to remove taxes, such as import duties and other consumption taxes, on mobile equipment.

Solomon explained that the governments would in the short- to medium-term increase their tax take.

The study, which was commissioned by GSMA and undertaken by Frontier Economics, showed that if all mobile-specific taxes on handsets, airtime and telecommunications equipment were removed in 2007, an additional 43-million people would be connected to mobile networks by 2012, leading to an increase in overall tax receipts of $930-million between 2007 and 2012.

Solomon said that if nonvalue-added taxes (VATs) were removed, governments in the majority of sub-Saharan African countries would receive incrementally higher tax returns as the industry growth would boost total Vat receipts along with corporate and employment tax receipts.

"If governments want to maximise the potential investment from [the mobile] industry, they need to consider two main things, consumer taxation and better regulatory practice," he added.

The association said that the research showed that the mobile industry in sub-Saharan Africa, which employed about 3,5-million people and had contributed an average of 4% to African countries' gross domestic product (GDP) in 2006, could boost the GDP of a country and generate employment.

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