Whereas customs duty is levied on imports into the country, excise duty attaches to goods manufactured within the country on specified items. Juxtaposed against a tax head that is widely known and associated with importation of goods; excise duty is an indirect tax that is levied to safeguard financial, public safety and health, public morals and environmental protection. Historically excise duty has been levied on alcohol, cigarettes and fuel; however its application has recently been extended to apply to Internet Service Providers (ISP's). It is therefore imperative to inquire into the morale and thrust of the levying excise duty on goods and now services remotely or indirectly associated with safeguarding the moral fabric, safety and integrity of health and financial systems in Zimbabwe.
Earlier this year the government extended the application of excise duty to ISP's at a rate of 10% across all associated services on offer. Indeed a narrow interpretation of internet services as an import may be factually correct considering the supply of internet services comes through fibre optic cable from across our borders. However it must be noted such strict and narrow interpretation will inadvertently impede on various developmental issues. More pertinent to this discussion, is that nothing exists outside the context of the law. Hence , whereas it may be financially prudent to expand the revenue sources for the fiscus, such intention ought to be weighed against other legalities. The Constitution of Zimbabwe entrenches rights and freedoms such as access to information, however when the providers of a service universally needed to bring such right or freedom to life, it erodes the foundation upon which this constitutional democracy has been established. Moreover there are practicalities from the emergent and now integral mode of life in which moat task require some form function performed online through the use of internet services. Indeed the COVID 19 pandemic regularised online meetings ,and this is true for schools and enrolled pupils. When viewed through such prism the levying of excise duty on ISPs presents an overbearing tax obligation, considering the ISP's have only placed such burden on the consumer, the same consumer who is charged a consumptive tax in the form of VAT.
On the other hand, it is true that there are many risks attached to use of internet services e.g. cyber security risks on personal data and financial systems. It is the authors opined view that such issues should not lead to the levying of excise duty on ISP's. Zimbabwe is facing considerable levels of unemployment, partly exacerbated by the global pandemic, and the cyber world is a ripe avenue for value creation. Such potential should not be unduly suppressed by over burdening the tax payer who is the same person required to be disruptive to become profitable within the cyber space. The freedoms and rights afforded to Zimbabwe's citizenry should be aided through mechanics such as tax subsidies as opposed overburdening the same with multiple tax obligations with indirect taxes such as excise duty being the most crippling.
From a practical perspective the law provides for mechanisms to challenge some of these issues. The jurisprudence around taxation can only be addressed by challenging arbitrary or unfair issues. Constitutionally indirect taxes may be seen as a barrier to entrenched rights such as access to information, or even the right of education for children. Equally the intent of such a tax head, being to safeguard the moral good of the populace or the integrity of public health , financial and environmental systems, may deemed as laudable it should be sparingly applied. The world is revolving around the cyber world hence it would be ill advised to use such mechanisms and inadvertently curtail, defeat and erode constitutionally entrenched freedoms.
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