The Ministry of Finance and The Ministry of Post and Telecommunication had announced new a method of the tax payment for newly purchased phones as from October 15, 2020. However six days after the deadline nothing has been heard of the phone tax. Could it be that government has dropped the tax or there are challenges in its implementation?
Tax Collection Mechanism: Transforming Phone Credit To Electronic Money
The customs tax representing 33.05% of the value of the phone leaving the factory will be deducted from subscriber’s communication credit in full or 0.5% deducted daily until the 33% is cleared. However, the issuance of electronic money is framed by community rules and controlled by the Bank of Central African States BEAC and The Central African Banking Commission (COBAC), which regulate it.
A CEMAC regulation of September 18, 2011 defines electronic money in CEMAC as “a monetary value incorporated in electronic form against delivery of funds of equal value that can be used to make payments to persons other than the issuer, without involving bank accounts in the transaction”.
However, BEAC specifies that issuing of electronic money is subject to the authorization from BEAC. Camtel and the other telephone companies are not a technical partner of a bank issuing electronic money nor transform communication credit into electronic money which will be transferred to the Cameroonian public treasury under the current dispensation.
They could however make payment via mobile payment; Orange Money, MTN Mobile Money and Possa. The representative of Arintech, the platform charged with collecting the tax via airtime credit, Paul Zambo said the company says it holds a first category license with specifications, though it is not yet recognized by BEAC.
Legislation On Electronic Money Issuance
A CEMAC regulation of September 18, 2011 relating to the exercise of the activity of issuing electronic money in prohibits companies that have not been authorized to engage in the process.
Consequently, Cameroon needs authorizations from BEAC and the requirement to be a technical partner of a banking establishment, issuer of this electronic to be able to apply the provisions of the 2019 finance law, which indicates that telephone buyers can pay customs taxes “via a levy made especially during telephone broadcasts As January 31, 2019, seven banks were authorized to issue electronic money in Cameroon.
These banks had in return ten technical partners including three mobile telephone operators MTN (Momo), Orange (Orange Money) and Nexttel (Possa).
So far, Arintech is not yet considered a technical partner. It is yet unclear if Arintech has a concession agreement or a license which is subject to the payment of a financial contribution made by the Telecommunications Regulatory Agency.
The Electronic Tax Collection Platform
Arintech’s electronic platform also requires interconnection with data from mobile telephone operators. In a joint release signed by the Minister of Finance, Louis Paul Motaze and the Minister of Post and Telecommunications, Minette Libom Li Likeng on September 29, 2020 stakeholders in this process are invited to make arrangements for the efficient implementation of this device, each as far as it is concerned, from October 1, 2020”.
At the time of the implementation of the law, it is still difficult to digitally verify customs clearance of a telephone. The new device also does provide the option.
Challenges Of IMEI Manipulation
The IMEI (International Mobile Equipment Identity) number which is the phone’s ID card is unique per phone it consist of a series of 15 to 17 digits. The platform uses the IMEI to identify whether or not a phone has been cleared. However, with the evolution of technology, there are software and means to modify, hide for a period or change the IMEI of a cell phone. Paul Zambo said they are working via data in triangulation trace all phones.
In Cameroon, the government is still working on the promulgation of a law on the protection of personal data as huge data from millions of Cameroonians will be accessible to Arintech. The company could sell to third parties or use it for other purposes.
There are no guarantees that the platform cannot be the victim of a hack with theft of data and even fraudulent integration of IMEIs of phones with customs clearance