Effective Tax Burden on Mobile Network Operators in Africa

Daouda Bamba, Alou Dama and Grégoire Rota-Graziosi ()
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Daouda Bamba: FERDI - Fondation pour les Etudes et Recherches sur le Développement International
Alou Dama: FERDI - Fondation pour les Etudes et Recherches sur le Développement International
Grégoire Rota-Graziosi: CERDI - Centre d'Études et de Recherches sur le Développement International - UCA [2017-2020] - Université Clermont Auvergne [2017-2020] - CNRS - Centre National de la Recherche Scientifique, FERDI - Fondation pour les Etudes et Recherches sur le Développement International

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Abstract: This study presents a comprehensive analysis of the tax burden on the mobile telecommunications sector across twenty-nine African countries, encompassing both general taxation and sector-specific levies. To conduct this assessment, we develop a model of a representative mobile network operator, referred to as TELCO, and compute its Average Effective Tax Rate (AETR) by incorporating both standard tax obligations and industry-specific fiscal charges. The average AETR is significantly high, ranging from 77 percent to 116 percent (or 44 percent to 83 percent when excluding license fees), depending on the assumed indirect tax incidence. Notably, the AETR exhibits a regressive pattern, whereby the relative tax burden decreases as gross profitability rises. This regressivity is largely attributable to the structural design of the tax system, which relies predominantly on indirect taxation.

Keywords: taxation; telecommunication sector; project analysis; developing countries (search for similar items in EconPapers)
Date: 2025-02-10
Note: View the original document on HAL open archive server: https://hal.science/hal-04938960v1
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