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Telecom operators oppose proposed tax
on talk time
Accra, Dec. 4, Ghanadot/GNA - Telecommunications industry
operators on Tuesday rejected government's proposed tax on
talk time on mobile phone announced in the 2008 budget
statement saying it would have a disproportionate impact on
the lower cost calls on all networks.
According to them, the very nature of that tax imposed
across board for all subscribers did not also take the
different social and economic means of consumers into
consideration.
Ms. Ursula Owusu, Managing Director of Westel and the
spokesperson for the group, told a press conference in Accra
that recent engagements with government confirmed that the
tax would be borne by the consumer. Under the tax, for every
minute subscribers spoke would attract one Ghana pesewa on
existing charges across all networks.
She said recent studies conducted by some foreign
telecommunications companies on the impact of taxation on
mobile phones revealed that increasing taxes on talk time
would reduce the amount of communication related to economic
activity in all sectors and therefore negatively impact
national development.
The spokesperson said already the Ghanaian consumer was
overburdened with a lot of taxes on telecommunications and
another tax would drive those already connected away from
using the services and those that are yet to be connected
would not come on board.
This development would slow down business activities related
to the industry, income and revenue would be affected and
consumers, operators and the government would all lose.
Ms. Owusu explained that the industry was confronted with
several external challenges yet to be addressed, each having
major implications for meeting the expectations of the
public with regard to quality of service.
Those challenges include the random upward review of
business operating fees, property rates, complex land
ownership rights and the timing for completion of permit
requirements and the multiple impact these have on
installing cell sites for delivery of quality
telecommunications service to Ghanaians.
Mrs Owusu said the mobile phone had become an important tool
for social development and should not be considered luxury
items on which additional taxes should be imposed.
She, therefore, suggested to the government to consider a
more equitable review of tax allocations for the economy.
The Minister of Finance and Economic Planning, Mr Kwadwo
Baah-Wiredu, in the budget statement last month noted that
it was easy to smuggle mobile phones into the country
undeclared and, therefore, untaxed.
"Import duties and import VAT on such undeclared phones are
lost to the state. The nation is, thus, not deriving maximum
revenue from the expected taxes on mobile phone imports,"
the Minister said.
He said considering the situation, Government had decided to
abolish import duty and import VAT on all mobile phones
imported into the country and introduce a more effective
means of taxing mobile phone usage.
"Consequently government proposes to impose a specific
excise duty per minute of air time use," Mr Baah-Wiredu
said.
The Minister said over the last several years, the cost of
phone airtime had fallen dramatically in Ghana due to
competition and technological advancement.
"It is, therefore, expected that further technological
advancement and improvements in the efficiency of the sector
will further reduce the cost of airtime and, thereby
minimize the impact of the excise tax," the Minister said.
GNA
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