The popular 3-days free calls offered by mobile telecom operators in Liberia are on the verge of collapse as the new tax on local calls takes effect this week, to the utter surprise and frustration of mobile subscribers. Since Monday, January 16, many subscribers have expressed disappointment upon noticing that when they recharged their accounts for the promotion, their voice credit almost immediately vanished.
The complaints came mainly from subscribers of Lonestar Cell MTN, but customers of its main competitor, Cellcom, may soon experience their own share of the woes.
Zenu Miller, Lonestar’s head of corporate communications, told our the Daily Observer that the free promotion remains on course, but blames the hurdles in the promotion on the new tax increment imposed by Liberia Telecommunications Authority (LTA).
The whole matter boils down to a new act of Legislature that was signed into law late 2016 amending the Liberian Revenue Code, requiring mobile telecommunications operators to tax all local calls at the rate of US$0.01 (1 US cent) per call.
And just two weeks into the first month of 2017, the Liberia Telecommunications Authority (LTA) is wasting no time to enforce the law, particularly Section 1165 of the Amended Revenue Code:
“The Minister of Finance and Development Planning (MFDP) has authorized the LTA to proceed with the enforcement of this new Section 1165, which we will do through billing and invoicing the revenues generated from this tax,” the telecom regulator announced to operators recently. “To this end, you are hereby notified that effective immediately and commencing no later than January 16, telephone service providers shall begin collecting the new excise tax of US$0.01 on all domestic voice calls.”
Section 1165 was recently inserted in the Revenue Code during the special session of the Legislature, as requested by President Ellen Johnson Sirleaf, purposely for tax code amendments as proposed by the Liberia Revenue Authority (LRA) and the MFDP.
The amendments in the revenue code became an option when it was obvious that government could not raise up to US$46 million of FY2016/17 Budget from its traditional sources of revenue owing to the decline in the prices of the country’s major export commodities.
The LTA also mandated GSM companies that, “beginning February 5, service providers shall provide to the LTA a copy of all record details (CRDs) covering all domestic voice traffic. In the event that the prevailing circumstances require the LTA to receive CRDs on a more frequent basis, service providers would be obliged to provide said data within time frame specified by the LTA.”
A source at Cellcom Telecommunciations told Daily Observer that recent taxation by the Legislature means that they might also likely discontinue their version of the US$1 for three days call promotion.
With the tax on local calls, customers have braced themselves for any hike in the cost of international calls by widespread use of internet based mobile applications such as WhatsApp, Viber, and Facebook Messenger. These apps have significantly decreased the cost of overseas calls on both sides of the phone line (Liberia and abroad).