The Ghanaian government has submitted a bill to its parliament seeking to impose an additional 6% taxes on inbound international calls. Mobile telecom operators currently already pay a Communication Service Tax or “Talk Tax”.
If passed, the mobile network operators will now pay a six percent tax on interconnection fees.
If approved by parliament, it will raise the taxes paid by Ghana’s six mobile telecom operators. Operators are likely to pass this tax hike on to customers, meaning when a mobile customer receives an international call, they will be charged for the call.
This is similar to the practice in the United States and India.
Additionally, the bill seeks to re-introduce import taxes on mobile phones so the price of mobile phones will likely increase should the bill get endorsement. Levied under the Customs and Excise bill, government will impose 20 percent on mobile phone handsets imported into the country to raise 49.8 million Ghana cedis. The government says this tax is also meant to protect local manufactures of mobile phone handsets
Meanwhile, the Ghana Chamber of Telecommunications, an umbrella body that seeks the interest of mobile operators, says it is gravely dissatisfied with the Communication Service Tax (CST) Amendment Bill currently before parliament under a certificate of urgency.
The Chamber said this in a statement issued in Accra.
They will also pay another six per cent on international incoming services in addition to the existing 15 per cent VAT and NHIL charged on international traffic.
Already network operators absorb the VAT and NHIL on international traffic because there is no opportunity to recover them as input tax.
Additionally, following cabinet approval, the Ministry of Finance is considering a further five percent Stabilization Levy on telecommunications services.
The statement said “for a sector that is considered so essential that operators are fined when their services fall short, it can be counter-productive to tax it like a luxury service”.
“We believe that government considers the telecoms sector as a driver of economic activity. However, if this bill is passed, it will hamper the capacity of network operators to invest in infrastructure to meet quality of service requirements and the growing demand for data”.
Ghana’s budget deficit rose to a whopping 12 percent last year and the government is seeking to find new avenues to raise revenue. The mobile telecom sector contributes 10 percent of all tax revenue received by the government.