In a major shift affecting Internet users in Zambia, the Network Service Providers Association of Zambia (NSPAZ) has announced a 17.5% increase in fixed Internet service costs, effective January 1, 2024. This adjustment is a consequence of amendments to the Customs and Excise Duty Act, implemented on January 1, 2023, applying excise duty to all fixed internet services.
Regulatory Landscape Shifts
The adjustment in internet costs stems from a regulatory shift, marking a notable amendment in Zambia’s Customs and Excise Duty Act. The decision to apply a 17.5% excise duty on all internet services reflects the evolving landscape of digital services taxation. While these changes were set in motion at the beginning of this year, the full impact is set to be felt by consumers starting next year.
Advocacy Efforts Unsuccessful
Despite concerted efforts by NSPAZ and Internet Service Providers (ISPs) to appeal for a review of the Excise Duty, these endeavors have proven unsuccessful. The regulatory framework remains unaltered, leaving NSPAZ and ISPs with little room for negotiation. This lack of success in challenging the duty underscores the challenging landscape that stakeholder face in influencing regulatory decisions.
In an exclusive statement to Techtrends, an NSPAZ member – who does not want to be named – expressed the association’s commitment to shielding customers from the heavy impact of these regulatory changes. The member stated, “NSPAZ has tirelessly engaged with relevant authorities and policymakers throughout this year, advocating for a fair and balanced approach to taxation that considers the interests of both consumers and service providers. Despite our best efforts, we have been unable to secure a revision of the Excise Duty.”
What Does This Mean for Consumers?
Come January 1, 2024, consumers and businesses will face a new financial reality when it comes to their internet bills. The additional 17.5% Excise Duty on the total cost of internet services will impact budgets and business expenditures alike. This change will necessitate a closer look at subscription plans and a potential reevaluation of internet usage habits. In addition to this, the adjustments are poised to increase the cost of doing business in an already price-sensitive market. Companies relying heavily on Internet services for their operations may need to reassess their budgets and financial strategies to the detriment of service providers.
Direct Communication from ISPs
To help users navigate this shift, NSPAZ advises consumers and businesses to reach out directly to their respective ISPs for specific details regarding the impact on their services. ISPs are expected to provide individualized communication to customers, outlining the changes and addressing any concerns.
As we stand on the cusp of this transition, it remains to be seen how consumers and businesses will adapt to the increased costs. The tech community, both in Zambia and globally, continues to grapple with the evolving regulatory landscape surrounding digital services.
This development serves as a stark reminder of the interconnectedness of technology and policy, where decisions made at the legislative level have tangible and direct impacts on individuals and businesses relying on digital services.
In conclusion, as the countdown to January 1, 2024 begins, the Zambian tech community braces for the financial implications of the Excise Duty adjustment. How these changes will shape the digital landscape in Zambia and influence user behaviour remains a topic of keen observation.
Techtrends will continue to monitor and report on developments as the tech industry adapts to these shifts in the regulatory environment. Stay tuned for more updates on this and other tech-related news.