Taxes crippling telecoms industry – Chamber of Telecommunications

The Ghana Chamber of Telecommunications has warned that the overburdening of telecommunications operators could affect revenue or taxes to government and also cripple the telecoms industry.

According to the chamber, soaring cost of operations, leading to reduced volumes and margins could  slow down the growth of the telecoms operators.

Speaking at the launch of the Tax Contribution Report for 2021 which forms part of the Mobile Transparency Initiative Report for 2021, the Chief Executive Officer of the chamber, Dr. Ken Ashigbey said a drop in corporate income tax from the telecom operators is imminent in 2022.

This he believes will be a loss to government considering that revenue from taxes in 2021 alone amounted to 7.7 % of Ghana’s tax revenue.

“Corporate Income Tax dropped from 2020 to 2021 and I foresee another drop in 2022. I am definite that the drop is coming from the Mobile Financial Services. Considering the current economic situation, volumes have gone down, revenues have gone down, but cost of doing business keeps rising. This affects profitability and if your profitability goes down, 25% of that in terms of your Corporate Income Tax reduces”.

“In the case of losses, you get nothing at all”, he pointed out.

Dr. Ashigbey also called for a reduction of the Electronic Transaction Levy from 1.5 % to 0.1 %, saying it is retrogressive in nature and should be structured well to make it affordable and easy for all to pay.

“The way we have structured E-levy is very regressive. It impacts the poor and the rich. So if you really want people to be able to pay this then they should not think about it when they are paying it. There is empirical evidence to show in other areas, if you take the Tanzania example. So it should be reduced to 0.1% that is one of the things that I have been pushing for. What will happen is that people will not feel it.”

On the increment of data and talk tariffs, Mr. Ashigbey was quick to add that, there could be increases in the near future considering the increase in cost of doing business.

Total industry tax and other remittances paid by the Telecommunication companies and other allied agencies to government for 2021 amounted to 4.3 billion. This makes up 7.7% of the government of Ghana’s total tax revenue.

Source: JoyNews