Sudan reduces tax on country’s cellcos

Sudan has scrapped a 30 per cent profit tax on telecom operators until end-2015, replacing it with a 2.5 per cent levy on total income, in a move that should help a sector hurt by the plunging value of the Sudanese pound.  

Sudan had the highest sales tax on mobile services in the Arab world, according to a recent report by Arab Advisors Group, deterring investment. 

Sudan’s decision, announced via the official Sudan News Agency (SUNA), reverses a government tax increase in December 2011, which raised sales taxes on telecom companies to 30 per cent from 20 per cent and a profit tax to 30 per cent from 15 per cent.

It is unclear whether the new 2.5 per cent tax on total income is in addition to, or replaces, the sales tax. 

Sudan’s three mobile operators – Zain Sudan, state-owned Sudani, and South Africa’s MTN – typically buy equipment in hard currency such as dollars or the euro, so the pound’s plunge has upped expenditure at a time when average revenue per user is in retreat.