Call for fair taxation in communication sector

Levelling the playing field: Why global giants like Starlink must contribute to Zimbabwe’s economic growth

As Zimbabwe emerges as a prime market for global tech giants like Starlink, the debate over fair taxation has intensified with experts arguing that these companies must contribute to the country’s economic development through taxes.

The contrast between the tax obligations of local tech firms and international giants is stark with Zimbabwean companies facing various taxes and levies, while global firms often enjoy lower entry costs.

As a result, experts say there is a need for Zimbabwe to modernise its tax infrastructure to capture the full scope of the digital economy.

According to Professor Newman Wadesango, an expert on fiscal policy, taxing global tech companies such as Starlink, Facebook, Amazon, and Alphabet could significantly boost Zimbabwe’s revenue.

“Given the country’s persistent budget deficits and low revenue levels, taxing the digital economy could provide a solid foundation for revenue collection,” he said. “This will enhance the government’s ability to fund public services and improve living standards.”

Wadesango noted, however, that Zimbabwe’s tax infrastructure is not yet fully equipped to handle the complexities of taxing digital platforms. He urges the government to develop legislation and strategies that capture the full scope of the digital economy.

“The world is rapidly moving towards digital transformation. Zimbabwe must embrace this shift and ensure that both local industries and national income benefit from it,” he added.

The conversation around taxation is particularly pressing given the contrast in tax obligations between local tech firms and international giants.

Zimbabwean tech companies are subject to a range of taxes and levies, including a 1.5 percent Universal Services Fund (USF) contribution, a 10 percent special excise duty on airtime sales, spectrum fees, numbering fees, and a 15 percent withholding tax on imported broadband services.

Mobile operators also face significant licensing fees. For instance, Econet Wireless Zimbabwe paid a staggering US$137 million for a 20-year operating license, while internet service providers (ISPs) are required to pay US$5.5 million. In contrast, Starlink’s entry into the market came with a far lower price tag —just US$575,000 for its license— prompting local business leaders and analysts to question the fairness of this arrangement.

James Kambalami, CEO of a local tech start-up, argues that global companies like Starlink should not be exempt from contributing to Zimbabwe’s economy.

“These companies are capitalising on the opportunities here, but they must also be part of the solution to Africa’s development challenges. Local businesses pay taxes, and global firms should do the same,” he said.

The issue is not just about fairness; it’s about Zimbabwe’s digital sovereignty. As Kambalami points out, “Zimbabwe needs to protect its digital sovereignty by ensuring we are not merely consumers of global technologies, but also beneficiaries of the wealth they generate.”

This sentiment is echoed by a growing number of business leaders who argue that African governments must enforce robust tax policies for international companies to ensure that tax revenues from foreign players are reinvested in local infrastructure and services.

Economist, Francis Mukora agrees, stating that multinational companies have a social and ethical responsibility to contribute to the development of the countries in which they operate.

“It’s not just about fairness. It’s about creating an environment where both local and international businesses can thrive. Without proper taxation, local companies will always be at a disadvantage,” Mukora explained.

To ensure fair contributions from global tech companies like Starlink, experts suggest Zimbabwe must modernise its tax policies to reflect the realities of the digital economy. Traditional tax systems often struggle to account for digital services and remote operations, leading to foreign corporations operating across African borders without paying taxes in the countries where they generate profits.

Tax consultant, Alexis Ncube, advocates for tax reforms that capture the revenue streams of digital companies.

“We need tax policies that ensure digital platforms pay their fair share, even if their operations are virtual or remote. African governments should work together to create a unified tax policy for digital services, so companies can’t exploit loopholes,” she said.

Ncube pointed to the Organisation for Economic Co-operation and Development (OECD)’s global minimum tax initiative as a model for how African nations could approach taxing international tech firms.

By adopting a regional approach, countries like Zimbabwe could ensure that global companies contribute fairly to the economies in which they operate.

As Zimbabwe seeks to carve out its place in the global digital economy, the need for fair and effective taxation policies has never been more critical.

Ensuring that companies like Starlink contribute to the country’s growth will not only provide the government with the revenue needed to invest in public services but also create a more balanced, competitive environment for local businesses.

“The future of Africa’s development is tied to its ability to create fair tax systems for global firms,” Ncube said.

“This is not just about collecting revenue — it’s about ensuring that Africa’s digital economy is built on a foundation of equity and shared growth.”-ebsinessweekl