Regulators and operators in East Africa’s communications sector have resolved to jointly push the governments of Uganda, Tanzania, Kenya, Rwanda and Burundi to change the excise tax law on communication services.In the past, the telecoms have pushed for a removal or a reduction in the excise tax rate that is levied on airtime – the key product that telecoms sell to millions of East Africans. The quest to remove or reduce excise tax has in fact been informed by a study that was commissioned by the GSMA Association and carried out by Delloite. Findings indicated that removal of excise would grow access and increase government revenue from airtime recharge vouchers and not the reverse. Despite those findings and further lobbying by operators, governments have not moved to reduce or remove the tax.

“Governments are maintaining excise duty rates because tax on airtime is an assured revenue source,” Annette K. Sengendo, who chaired the assembly of telecoms, said during the East African Communications Organisations (EACO) Congress in Kampala last week.
“But we are saying complete removal of excise on airtime will stimulate increased airtime usage, which will lead to an increase in government revenues through increased value added tax (VAT) collections.”
Within the East African Community (EAC) member countries, excise tax ranges between 5 percent and 12 percent. This is on top of VAT, which ranges from 16 percent to 18 percent – ranking the East African region as one with the highest calling rates in the world.
The EACO Congress, which is working to harmonise communications regulations and guidelines across East Africa has now adopted a common stand on the matter resolving to push through the EAC Secretariat in Arusha the proposal to harmonise excise duties across the region.  EACO will give the EAC governments a couple of options on this sensitive issue including asking them to suspend excise tax for a period of 2 years and in that period examine the effect of penetration of services and stimulation of GDP. Should the governments fail to remove or suspend excise taxes, EACO has proposed that governments pursue a phased approach of reduction of excise tax over the same period of time.
On the proposed introduction of mobile number portability (MNP), EACO has adopted a proposed timeframe of 24 months within which operators and regulators should prepare and be ready to implement MNP.But before MNP is introduced, the telecoms have recommended that regulators consider carrying out a cost versus benefit analysis prior to implementation and regulators should identify whether proprietary services will be subjected to porting. Where MNP is to be implemented, the telecoms have recommended that the regulator and operators jointly discuss regulations to govern the MNP process, agree jointly on porting solution and the acceptance criteria for choosing third party vendors of common systems.

The Congress adopted the proposal that all operators apply to AFRINIC for IPV6 address blocks and activate them as a way of migrating away from the older system.
That the regulators need to facilitate the increase in the use if IP communications in the region by adopting the practices of the London and Amsterdam IXPS, which allow an operator to directly connect to exchange points in the respective countries without the need to set up business operations in the country.
On a key contentious but environmentally sound proposal of infrastructure sharing, the Congress adopted the proposal that operators put in place in a regional backhaul infrastructure between Mombasa, Nairobi, Kampala, Kigali, Bujumbura and Dar es Salaam as a complete ring for the traffic between the landing points for the fibre in Mombasa and Dar es Salaam. Regulators will encourage private investment in undersea cables as the existing capacity is finite. Congress adopted the proposal that the subscriber registration process be formally captured in appropriate legislation in EAC member states except Tanzania, which already has legislation in place.
It was also agreed that a realistic period for subscriber registration exercise be implemented by the regulators but in any event not less than 24 months.

On cyber security, Congress adopted the proposal that there is need for operators to form and run sectoral CERTs (Computer Emergency Response Teams) and nominate representatives to sit on national CERTs. That the regulators will act on the ITU/IMPACT initiative to establish national CERTs.