Mobile Tax Policy and Digital Development: A Study of Markets in Sub-Saharan Africa
The mobile economy in Sub-Saharan Africa (SSA) has grown enormously during the past two decades. By the end of 2021, 515 million people in the region subscribed to mobile services, and this is expected to reach 613 million unique subscribers by 2025.1 In 2021, the mobile sector generated 8% of GDP, equivalent to more than USD 140 billion of economic value added.
Despite this progress, in 2022, both the usage gap (61%) and the coverage gap (17%, nearly one-fifth of the region’s population) remain significantly high. A crucial factor affecting the usage and coverage gaps is the substantial tax burden imposed on the mobile sector, including taxes on consumers and operators, especially in the form of sector-specific levies. High taxes on consumers directly affect the affordability of mobile devices and services, while taxes on operators curtail their ability to invest in expanding mobile network coverage.
This report compares the tax burden of the mobile sector with that of the mining sector by analysing its tax contributions in relation to economic size in a number of SSA countries where data is available. Findings show that, in 6 out of 7 countries compared, the mining sector makes an equal or lower tax contribution relative to its economic size. This illustrates the outsized taxation borne by mobile operators.