News & Current Affairs

Fractionated Telecom Operations: Tax Boom Goes Burst

Fractionated Telecom operations war for state actors is nigh. Like many private companies and entities, leading telecommunications operators, Africell and Orange, voice economic constraints with a potential to hamper effective service delivery. The duo and closely related companies reveal if the economic crisis is kept sustained, it will lead to reduce service delivery that will see a total closure of both companies within the country eventually.

The two companies. Africell and Orange, have dominated the country’s Telecom landscape for years with new player such as Qcell challenging the status-quo in their operations before now with cost effective tariffs. When asked why others aren’t complaining that much, senior business rep for Africell Joe Abass Bangura, mentioned they are bigger and serve most part of the country hence they feel the pinch the more. In this light, it is impressive from their part to say, they need the attention of state actors to drive their concerns home for considerations. Service delivery, service expansion, cooperate social responsibility and tax contributions are at stake here if something is not done about the situation Mrs. Karta Orange and Joe Abass Bangura of Africell affirm.

Qcell however, buffs off that figure saying the acclaimed companies co-locate with them more than they do and are in places never reached by Africell and Orange.

The two companies employ about a hundred thousand Sierra Leoneans with huge contributions to the governments tax pot combined. Fractionated service would mean, most homes of employees who may be laid off will be forced to leave well below the average life thus compounding hardship within the country as opined by the World Food program’s market report recently published in their quarterly. The very loss of employment will mean less returns on PAYE and reduced cooperation tax contribution to a total absent tax funds, which will invariably tell on the government’s delivery.

Where there are less revenue pull, projected budget delivery is squeezed, meeting needs of the government wage bill will be challenging and of course local government initiatives will suffer the most. Before now, Africell seem to have sponsored government infrastructural development even at low profit margins in their cooperate responsiveness to community needs and letting this go will be key for most local initiatives.

Sky rocketing foreign exchange rates that impacts on purchasing key equipment replacement or for service expansion or advancement in the sphere of company loss means survival is impossible without tariff price reviews and tax rebate.

Just before 2018, the SLPP manifesto was aimed at closing pilferages in the tax system. A big difference was seen but it’s time that manifesto position is reconsidered in the event of current global economic crisis. To the very least, give tax breaks to companies and reconsider reduction in licensing fees to cushion the effect of the Forex and global economic crisis for companies, employees and tax flows. A form of economic stimulus. The once booming tax is going burst and readjustment is necessary in all sphere of the economy.

Sticking to stringent revenue collection positions will make it worse in the long run as the very source of the revenue will be no more meaning all budgets will go unfulfilled. The citizens will also feel the pinch. The best way forward is tax breaks. Increasing tariff in any margin of more than 5%  for citizens will only burden the poorer nation causing further political alienation and dissatisfaction especially where staple food price hikes are apparent.

If the government considers tax rebate for telecoms, it must also consider the same for all institutions for economic stimulus and maintenance in the ever challenging and uncertain global economy now.

For more on Qcell, visit also, and More on news and views reach

Fractionated Telecom operations.

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