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Senegal slams new tax on telecoms operators

Senegal slams new tax on telecoms operators

Telecoms operators in Senegal will have to pay 5% of their turnover, excluding taxes and net interconnection charges, to the government as Telecommunications Special Contribution (CST) at the end of each quarter.

The new tax was ratified by the country's 2018 Amended Finance Law and replaces the Contribution for Economic Development (PST), introduced in 2017, prior to which companies were paying 5% towards the Universal Services Fund (USF).

According to PST, operators had to pay 3% of their turnover excluding taxes and net interconnection charges.

Senegal's Gathering of Enterprises in the Information and Communication Technologies Sector, RESTIC, described the latest tax as "a danger to the development of Senegal's telecoms sector".

RESTIC said the country requires FCFA 450 billion (US$801 million) in investments and network equipment over 10 years if it is to achieve an average growth of 7% in ICT.

The organisation is concerned the new tax will restrict new investment and force operators to cut costs and recoup as much as possible from what is paid.

It urged the government to be strategic and update its policies.

RESTIC issued a statement which read: "Senegal, has major assets in telecommunications and the digital economy with one leaning on the other to form an ecosystem providing innovation and potential wealth in added value for users. The establishment of a digital economy induces huge and massive investments for the telecom sector which is the backbone of the broader information and communication technology sector."

Officials have yet to respond to requests for comment.

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