Tax on Internet in Malawi: a Retard to the Country’s Development

Sellina Khumbo Kapondera is a lecturer in the Department of Library and Information science (LIS) at Mzuzu University, Malawi, since 2010. She is also the head of LIS Department. She holds a Masters Degree in Library and Information Studies from the University of the Western Cape, South Africa, obtained in March, 2015. She holds a Bachelor’s Degree in Library and Information Science from Mzuzu University, Malawi, obtained in 2010.

For five days last year, I was privileged to attend the Second (2014) African School on Internet Governance in Mauritius, curtsey of the New Partnership for Africa’s Development (NEPAD) and Association for Progressive Communications (APC). In that beautiful and well decorated conference room of Bel Ombre, Tammassa Resolt, I listened to a very inspiring and thought provoking presentation on the link between a country’s development and investment in internet.

The presenter proved beyond doubt that there is a correlation between a country’s development and investment in internet technologies. In fact, there is a positive correlation between these two. Several examples of countries that have benefited from investing in Internet were given. One of them is South Africa where part of its Gross Domestic Product (GDP) comes from the internet. I did not find it difficult to believe these assertions having lived in South Africa for two years where I personally witnessed those country’s relentless efforts in valuing and investing in internet technologies and how this investment helped to improve that country’s social economic development. Just as I expected, after giving examples on the countries whose part of GDP comes from Internet like the one I have just mentioned, South Africa, the presenter also gave examples of countries that have not done much in investing in Internet and that, if they would invest more, they were going to benefit more than any other country.

I was not shocked to see that my country, Malawi was one of the four countries in Africa that have done little in investing in internet. So, this gave me the zeal to work on something to present to the Government to convince it to invest more in Internet. As I am working on it, the country just does the unforgivable: it introduces tax on internet. This just shows that we are moving backwards as far as development is concerned. I mean, before we even started talking about the introduction of tax on internet, how many Malawians were affording Internet? Is it not absurd to have the same country talking about transforming the country into a developed one through Malawi Development Growth Strategy by investing in Information and Communication Technologies (ICTs) at the same time introducing tax on internet?

It is common knowledge that we are living in an information society. One cannot talk about development without talking about investing in internet in the information society. Without doubt, the link between internet and development is strong. Internet has been adopted as a vehicle for service delivery in many sectors including health, education and agriculture just to make a note of some. For example, one cannot discuss development without bringing in health issues. There is need for healthy people in order for a country to develop. Connection with internet? Well, it’s very clear. These days, people go on the Internet to look for health information. For instance, when one is sick and wants some information on the right medication, instead of going to the already congested hospitals in many developing countries like Malawi, that person can make use of the Internet as the first option of health information. They can go on the internet, get that information, use it, get healed, back to work. In addition, internet can be used to locate where health facilities are. I, for one have used Internet to find out about the location of some hospitals a couple of times.

Not only in that way does internet help in the development of a country. Many countries like Malawi rely much on agriculture and there is a lot of agricultural information on the internet which, when properly used, the result is high production, contributing to the country’s where between 70-80% of the GDP comes from agriculture. That’s development being discussed here. That’s the link between development and internet.

We can hardly discuss development without mentioning education. People need to be well educated for a country to be called a developed country. Some universities in Malawi, Mzuzu University for example, have introduced Open and Distance Learning Programmes. Students enrolled under such programmes need to have access to the internet. Now, with the introduction of tax on internet, are these courses going to be effectively delivered considering the fact that many Malawians including the students under these programmes live below the poverty line of USD1 per day? At the same time, university students need to conduct research of which access to Internet provides them with a wealth of information for their research studies. These, I am sure will be negatively affected by such a sad development. I wonder why the Government has to be that inconsiderate. These are just few of the many examples that show us a link between development and investing in Internet.

Internet helps us to communicate with people quickly and above all conveniently. In the past, we used to send letters through post offices. These would take so many days, weeks or even months to reach the recipients. With the coming in of ICTs especially Internet, people have been able to send messages which get to the receiver instantly. Emails and social networks for example facilitate such a quick communication. Communication has been made so simple and easy with these ICTs. With the social networks, people communicate with one another on some life uplifting issues. This is a reality with access to the Internet. This can hardly happen when one does not afford that access to Internet.

I wonder how many Malawians will be able to continue communicating using Internet with the introduction of this duty. Or should I assume the Government does not know of implications? Maybe I should just believe what the Executive Director of the Consumers Association of Malawi said in the Weekend Nation of May 30, 2015 that “our leaders are stuck in the postal era,” (Mzungu, 2015:16). This sounds to be true. But it gets one confused because it is the same Government which emphasizes the need of providing access to ICTs at affordable prices. For example, in the Malawi national ICT for Development Policy, the Government acknowledges that the country cannot develop without the implementation of appropriate ICT framework to support and accelerate development. The policy further says that one of the ways of making sure that ICT supports development of the country is by ensuring universal access to ICTs (Government of Malawi, 2006).

With the introduction of tax on Internet, it is doubtful that the country is living up to its word i.e. promoting universal access to develop the country. I am sure that this tax on internet will further increase the digital divide. The Government is introducing telecentres in rural areas whose aim among others is to provide ICT services at low cost thereby bridging the digital divide. However, there is evidence in the literature (for example, Kapondera, 2014) that some of the services in these few telecentres currently in operation are used by a few people only. One of the reasons of this low usage is that some services like Internet services are offered at higher prices. I wonder what impact the introduction of duty on Internet will bring on such services. Will they not end up having zero users? Is this not counterproductive? Let’s wait and see.

Well, the reasons for the introduction of tax on Internet according to the Minister of Finance as quoted by Gwede (2015) is that “there is tremendous uptake on telecommunication services in the country and that the Government of Malawi wants to generate resources for the national budget.” My take on the first reason is that the Government itself should not have even given that as a reason enough to introduce tax on internet. It is the same government that says that there is need to increase access to ICTs for Malawi to develop. If there is tremendous uptake on telecommunication services, then it just has to celebrate, that it is doing well on achieving one of the objectives. My take on the second reason for introducing this tax on Internet is that the Government should consider introducing this on other items or maintaining the percentages of tax on some items like cars whose taxes have been reduced. I am yet to read an article which says that one of the criteria for measuring the level of country’s development is the number of cars that a country has.

As I am writing this, I am told by a friend that one of the network service providers effected this for a few days though. A huge smile on my face after hearing that it was just for a few days before it was suspended. How I wish it was suspended forever. Stop this, invest in Internet.

References

Gwede, W. 2015. Malawi hikes tax on Internet, duty on SMS: Goodall says local resources to finance 2015/16 budget. The Nyasatimes. 23 May. [Online]. http://www.nyasatimes.com/2015/05/23/malawi-hikes-tax-on-internet-duty-on-sms- goodall-says-local-resources-to-finance-201516-budget/. (Accessed 9 June 2015).

Kapondera, S.K. 2014. The use of multipurpose telecentres in Malawi: The case of Lupaso Telecentre. Masters thesis. University of the Western Cape. [Online]. http://etd.uwc.ac.za/xmlui/handle/11394/4115. (Accessed 9 June 2015).

Mzungu, W. 2015. Six questions for executive director of the Cosumers Association of Malawi, John Kapito. Weekend Nation. 30th May. P. 16.

Government of Malawi. 2006. Malawi National ICT for development (ICT4D) policy. [Online]. http://unpan1.un.org/intradoc/groups/public/documents/unpan/unpan 033688.pdf (Accessed 10 June, 2015).

Government of Malawi. n.d. Malawi Growth and Development Startegy II 2011-2016. [Online]. http://www.mw.one.un.org/wp-content/uploads/2014/04/Malawi-Growth-and- Dedvelopment-Strategy-MGDS-II.pdf(Accessed 5 June 2015).