In the past decade, communication has been greatly eased through online platforms such as Skype, WhatsApp, and Telegram, among others. With improved Internet connectivity, it has become increasingly common to conduct free international and local calls over these platforms than over normal network service providers. However, the government of Zambia has announced plans to tax online calls in an attempt “to protect its local telecoms companies.”

Zambia’s Plan to Tax Online Calls

In the past few months, two African governments have introduced measures to increase revenue collection locally based on the use of online platforms among their citizens.

Uganda recently introduced a tax on social media, and Zambia has proposed a tax on online call platforms.

In Zambia, a tax of $0.30 will be collected daily through mobile operators and ISPs. It is targeting the 80 percent of users on WhatsApp, Skype, Viber and other platforms with the argument to protect the jobs of workers of Zamtel, MTN, and Airtel.

While online messaging and calling apps are free to use, their service providers are the main beneficiaries of revenue from the great economies of scale of their users. Governments cannot often tax the multinational organisations at the local level.

However, a tax on online calls begs the question: “Won’t these taxes hinder users from accessing the liberties and the conveniences that these platforms have to offer?”

Furthermore, will the tax be a sustainable solution to secure the future of the country’s telcos or will the telcos be forced to innovate in order to remain relevant to their clients?

What Impact Would Such a Tax Have on Innovation in Zambia?

While Zambia’s new proposed tax may help local telecom companies, its long-term impact on the quality of life of the citizens must be put into consideration. Will it cost, even more, to make simple calls because of this tax? Will people be quick to find viable, private and secure alternatives to make calls?

Furthermore, will this not set the stage for alternative methods of tax avoidance and indirect exploitation that could ultimately stifle innovation?

Just because a tax can be introduced does not mean that it should be. Innovation should be handled with regard to the end user’s satisfaction. Telcos need to refine their models in order to serve their clients in such a way as to attract their loyalty and their profits.

Innovation primarily makes life easier, more convenient and cost-effective for people. Therefore, regulations and policies should support, rather than stifle this from happening. Lower costs for calling and messaging through online platforms have made it easier to communicate and to do business. The government should support that for the improved quality of life of its citizens, rather than put it at risk through taxation.