Cran's regulatory levy akin to taxTelecom Namibia’s challenge of Cran’s levy imposed on service providers is stretching the boundaries of the regulator’s legal rights, the High Court has ruled. Court rules in favour of Telecom challenge 0 The High Court last week declared unconstitutional and invalid provisions of Namibia’s communications legislation that allows the industry regulator to cover part of its expenses through levies imposed on service providers.Acting Judge Collins Parker ruled in favour of Telecom Namibia, which challenged the constitutionality of a regulatory fee initiated by the Communications Regulatory Authority of Namibia (Cran).
Parker in his ruling emphasised that the disputed levy did not show any direct connection to the Cran’s regulatory framework, and thus had to be vetted for possible circumvention of the constitution.
“The charges provided in Section 23(2)(a) of the Communication Act of 2009 have the attributes of tax and therefore not constitution compliant,” Parker said.
Cran was ordered to pay the costs of Telecom’s application.
The particular section 23 (1) of the Communication Act of 2009 says that the Authority may by regulation, after having followed a rule-making procedure, impose a regulatory levy upon providers of communications services in order to defray its expenses.
Subsection (2) of the Act states that regulations made in terms of subsection (1) may impose such levy in one or a number of forms, based on a percentage of the service provider’s income.
This may apply to income derived from the whole business, or a prescribed part of such business.
The communications regulatory frameworks on the other hand, are established to achieve regulatory objectives such as affordable pricing, ICT access and usage, and competition.
Parker stated that as section 23 (2) currently stands, Cran is effectively being allowed to impose a levy without having carried out the actual or properly estimated costs of its regulatory functions.
“I find that there can be no relation established between the levy and the regulatory scheme itself in the way the section is formulated,” Parker said.
“CRAN has failed to establish that the levy chargeable… is connected to the regulatory scheme under the Act. And I find that Telecom Namibia has shown that the so-called levy as enabled by the provisions has the attributes of a tax,” Parker ruled, before declaring the challenge application a success.
FRED GOEIEMAN