Sudanese angry over telecom tax hikes

The raising of taxes on all Internet, mobile and telecommunications services in Sudan have left many angry with the government. The move, approved in late December for the 2012 budget, is in order to overcome pitfalls from lost oil revenue as a result of South Sudan’s independence last year.

Many Sudanese are angry over the tax hikes (image: stock.xchng)

“It is ridiculous that they are putting all the extra costs on us,” mobile market owner Salem Bahreddin told IT News Africa via telephone from Khartoum. “Lots of people are angry and it is really upsetting our ability to live and have the same money to buy things.”

The tax raises were part of an emergency three-year economic program announced by the government, which includes a reduction in spending and increased tax base.

Sudan’s senior tax official Mohammed Osman said the government is increasing taxation on communication services from 20 percent to 30 percent, and raising taxes on the net profit of communication companies from 15 percent to 30 percent.

“One component of income tax, affecting most of the population, will also be raised to five percent from three percent,” Osman said.

The government has already introduced a number of austerity measures to cope with the disappearance of oil income from the south, which the finance minister said in December left a budget shortfall of some 30 percent.

South Sudan gained independence in July following a two-decade civil war. Since then, Sudan has witnessed spiralling inflation – which the government sees reaching 17 percent next year – and the sharp devaluation of the Sudanese pound.

At the same time crippling debts of almost USD 40 billion and US economic sanctions, which have banned virtually all trade with Sudan since 1997, choke its access to external financing. South Sudan produces three quarters of the now-divided country’s 470,000 barrels per day of oil.

Average citizens however, are hopeful that negotiations with Juba will enable the country to return to its previous levels and push the economic situation back forward after months of worries and wrangling.

Desmond Shephard