Cameroon’s Quirky Phone Tax Cuts Phone Import Duties From User Airtime

Today, October 15, is the supposed set date for the implementation of a “creative” tax regime fashioned by officials of the Cameroonian government.

For much of last week and the current one, Cameroonians have taken to both online and offline media to push back against an odd tax. This new tax compels device owners to pay a levy equivalent to 33 percent of the cost of the phones or tablets they purchase from October 2020 as import duties.

Indeed, according to Cameroon’s newly-accented 2019 Finance Law, smartphones and tablets can be imported duty-free into Cameroon, but the end buyer will have to pay the duties (equivalent to 33 percent of the product’s factory gate price). And it has now been revealed that this would be paid via airtime deductions.

In a joint communiqué signed by the country’s ministers of Post and Telecommunications and of Finance, authorities explained that the new move falls in context with the 2019 Finance Law. Per Article 7 of said law, all imported mobile telephones, as well as electronic or digital tablets, will be taxed.

“These duties and taxes are collected and handed no later than the 15th of each month, to the competent customs service by all telephone companies,” It reads in part.

The article adds that enterprises or network operators involved in the sector are required, in collaboration with the competent State services or their agents, to “configure their systems in such a way as to avoid any connection to their respective networks by non-custom phones and tablets.”

The authorities have also recently announced that it has hired a hitherto unknown and almost invisible French data collection and management firm, Arintech, to start collecting the customs duties on mobile and tablets via digital means.

This brings data privacy/security concerns of its own, as well as issues related to multiple-taxation and which telco gets to collect and remit the tax from users with devices that use multiple SIMs at the same time.

Paul Zambo is the Chief Executive Officer (CEO) of Arintech, an agent of the State in the development of the new platform for collecting customs duties on mobile phones and tablets.

According to him, the platform is designed to gather the data of all telephone operators in Cameroon and it uses a “very effective triangulation system” to solve telephone-type problems. This, he believes, will solve the multiple SIM or IMEI duplication problem.

While speaking as a guest on the program “Scène de Presse” on government television, CRTV, on October 11, Zambo reportedly admitted that the technology is not 100 percent secure. That would imply it is not entirely reliable.

To put it simply, all the mobile network operators in Cameroon — Camtel, Mtn, Orange, and Nexttel — are to cooperate with Arintech in sorting and streamlining data on mobile users in the country such that, starting from October, Arintech would be able to trace and tax all devices that are in use without clearance from customs.

According to the data from TheGlobalEconomy’s report, the number of cellular subscriptions in Cameroon as of 2018 was 18.46 million. For comparison, the world average in 2018 based on 173 countries is 46.86 million subscribers.

In a sense, the Cameroonian authorities seem to be asserting that it is also the responsibility of the consumer to ensure that any device purchased has been cleared through customs. And that the consumer would have to pay the import duties if it is determined that the purchased device was not cleared.

Many have decried this assertion put forward by Posts and Telecommunications Minister, Minette Libom, who many have accused of pushing a tax that will do much harm and no good. They argue that it is the responsibility of the authorities to claim duties from importers and not pass on the burden to the end-user.

It has been stated that Arintech, which will be working closely with telcos, in the country will, supervise the sending of text messages to alert subscribers whose devices have been identified as uncleared.

The message will come with the option of either making a one-time payment or paying in installments. It follows that the tax will be deducted from the airtime of the user until the full levy is paid. Telcos are to collect and remit the funds to the government under supervision by Arintech.

It’s all part of a bizarre tax regime that many Cameroonians have criticized and condemned as flawed and insensitive. The #EndPhoneTax and #EndLibomTax Twitter hashtags have trended for days in the Cameroonian Twitter community.

Politicians, civil society groups, and opinion leaders have denounced the increase in the tax burden with the immediate effect of reducing the purchasing power of consumers in Cameroon. Even the telcos themselves have voiced their concerns on the issue which can be expected to impact subscriber numbers and revenue.

Featured Image Courtesy: Pacific Standard