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Sonatel official says controversial tax will cut revenues by 10%

8 Sep 2011

Bloomberg reports a senior official of Senegalese national PTO Sonatel as saying the government’s controversial tax on international incoming calls will likely result in a 10% fall in revenues for the company. Mamadou Aidara Diop, a member of the company’s board and secretary-general of the Labour Union of Sonatel Workers, went on to say that it would also lead to many more Senegalese living overseas to use VoIP-based alternatives to circumvent paying for the higher rates Sonatel will have to charge. ‘People will find alternative methods to call,’ the official said. The proposed tax adds XOF49.2 (USD0.10) per minute on calls to mobiles made from outside the country – up 53% on the previous rate – while calls to fixed numbers impose an extra XOF75.45 on users. Given that international calls account for more than two-thirds of the incumbent’s annual turnover, Diop is concerned about the ramifications for the telco. When President Wade implemented a similar tax last year, Diop said calls from abroad dropped by 15%. Sonatel has apparently taken the matter to the courts, claiming the tax to be outside ‘legal norms or international law’, and the telco’s union is also contemplating a strike later this month, he said.

Senegal, Sonatel (Orange)

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