The Ghana Chamber of Telecommunications says it wants government to recognize the tax collection efforts of the telecoms industry on behalf of government, which comes at a cost to the telecoms companies and for which there are no incentives.
Players in the telecoms industry believe that they do a lot in collecting some taxes for the Ghana Revenue Authority, for which the authority has officials whose duty it is to collect those taxes.
According to a study by PricewaterhouseCoopers (PwC Ghana) on the total tax contributions of five Ghanaian telcos for 2013 and 2014, taxes collected by the telecoms companies on behalf of government were 3.2 and 2.5 times more than taxes borne directly by the telcos in 2013 and 2014 respectively.
This means that for every GH¢1 borne directly by the telcos in taxes, another 3.2 and 2.5 were collected on behalf of government in 2013 and 2014 respectively.
According to the study, the total taxes collected by government and paid directly by the telcos in 2013, amounted to GH¢1.04 billion, representing 6.9 per cent of government’s tax revenue, and GH¢1.05 in 2014, representing 5.4 per cent of government’s tax revenue for the year.
For 2013, 35 per cent of the taxes were fees to regulatory agencies, 31 per cent corporate income tax and national fiscal stabilization levy, 30 per cent product taxes, three per cent people taxes, and one per cent property taxes.
In 2014, corporate income tax and national fiscal stabilization levy made up 49 per cent of the taxes, product taxes comprised 24 per cent, fees to regulatory agencies 22 per cent, people taxes four per cent, and property taxes one per cent.
The telecoms companies also believe that the existing taxation on the industry is a bit on the high side .
According to Gayheart Mensah, Head of External Affairs at Vodafone Ghana, Ghana was cited in one international study to be among the countries where telecommunications companies pay high taxes.
According to him, the current system is “a regime of taxation which takes a lot of money from the telcos” and impacts their investable resources, in an industry that requires constant investment.
PwC’s study shows that while there was a decline in capital expenditure by an average of 43 per cent between 2011 and 2013, there was also an increase in operating expenditure by 63 per cent between 2012 and 2013.
By Emmanuel Odonkor