In a statement accompanying its consolidated annual financial results, Econet’s chairman Dr. J Meyers highlighted how the regulatory directive to reduce tariffs as well as the 5% tax added to all airtime prejudiced the operator of $95 million and $30 million respectively.
Part of the statement reads,
'We estimate that the adverse impact of the tariff reduction on the full year revenues was about US$ 95 million. Contrary to normal practice, where excise duties are levied on the customer, the excise duty on airtime, was levied on the Company. This position was, however, reversed on 1 January 2016, and the Company was allowed to levy the duty on its customers. The excise duty levied on the Company resulted in a revenue reduction of US$ 30 million, for the year under review.'
POTRAZ’s reduction of interconnection fees from 5 cents to 4 cents per minute was also identified as a cause for reduced revenues, depriving Econet of $4.5 million while the increase in contributions to the Universal Services Fund (USF) from o.5% to 1.5% of revenue was also cited as additional $0.8 million in costs.
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