• July 4th, 2020

Simataa tables Communications Amendment Bill

Maihapa Ndjavera

Minister of Information and Communication Technology Stanley Simataa this week motivated the Communications Amendment Bill in the National Assembly. The minister said the Bill provides for a broad definition of “regulatory cost” to ensure that all regulatory costs incurred by the Communications Regulatory Authority (CRAN), which should be defrayed from the regulatory income, are covered.
Additionally, the Bill provides for a more simplified basis for imposing the regulatory levy that is either turnover or a fixed amount.

“The Bill also specifies the objectives of the regulatory levy and how it must be determined, of which the main guideline is that income derived from the regulatory levy must be sufficient to cover the anticipated expenses of the authority,” he explained.

The minister said the Bill further makes provision as to how the authority should deal with any under or over-recoveries and future levy determinations. The Bill also obliges the authority to review the regulatory levy at least once every five years.

“I must also point out that since the universal service levy provided for in section 56 of the Communications Act is also a regulatory charge, the same unconstitutionality needs to be cured. As such, simplified guidelines have been provided for the determination of this levy by prescribing that the universal service fund levy may not exceed 10% annual turnover of service providers,” said Simaata.

The urgency of the Bill comes after CRAN in September 2012, under government Notice 31 of 2012, imposed a levy of 1.5% on the annual turnover of communications service providers. CRAN as a communications regulatory authority in Namibia is supported by section 4 of the Communications Act No 8 of 2009. 

Section 23 of the Act makes provision for the authority to impose a regulatory levy on communications service providers in telecommunications, postal services and broadcasting.
One of the telecommunications service providers, namely Telecom Namibia, mounted a court challenge on the basis that the regulatory levy be regarded as a tax and not a regulatory charge and should as a result be declared unconstitutional. 

Simataa noted that on 29 September 2016, the High Court delivered its judgement and declared section 23 of the Act and regulation 6 of the Regulatory Levy Regulations unconstitutional on the basis that the regulatory levy was a tax and not a regulatory charge since there was no clear connection between the imposition of the levy and the regulatory cost of the authority.

The court said the regulatory cost must be actual or properly estimated and the income generated by the regulatory levy must match such regulatory costs.

CRAN appealed the High Court judgement and on 1 June 2018 the Supreme Court ruled that the regulatory levy was indeed related to the regulatory scheme and irrespective of whether income generated from such levy exceeded the regulatory cost of the authority, it was still a regulatory levy and not a tax.
“The ruling further stated that the authority granted to CRAN to impose a regulatory levy had no guidelines of limitations and was thus tantamount to CRAN being granted uncircumscribed plenary legislative powers and on this basis, section 23 of the Communications Act was declared unconstitutional and struck down,” continued Simataa.

Since the order of invalidity taking immediate effect would create a legal vacuum in the levy regime, the Supreme Court ordered the order of invalidity to take effect as from the date of the judgement however bearing in mind that Telecom Namibia would not be required to pay a levy imposed on turnover before the publication of the regulatory levy regulations. 

As a result of this landmark ruling, CRAN, which does not receive funds from the State, lost a substantial portion of its revenue base and runs the risk of ceasing its operations if the constitutionality of the levy regime is not addressed. Although the ministry has set in motion the iterative process of reviewing the Communication Act, the urgency of addressing the declaration of section 23 as unconstitutional, necessitated the development of the Amendment Bill. -mndjavera@nepc.com.na

Staff Reporter
2020-02-27 07:08:22 | 4 months ago

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