24th November 2023 12:26:42 PM
2 mins readThe telecommunications sector has made significant tax contributions to the Ghanaian government, surpassing GH¢6.07 billion in 2022, marking a substantial increase from the GH¢4.02 billion paid in 2021.
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Major contributors include AT, MTN, Vodafone, ATC, Helios, Comsys, CSquared, Ericsson, and Huawei. Dr Kenneth Ashigbey, CEO of the Ghana Chamber of Telecommunications (GCT), revealed this information during the launch of the 2022 Mobile Industry Transparency Initiative report on November 21, 2023, in Accra.
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The industry's tax contribution accounts for approximately 8.02% of the government's total tax revenue of GH¢75.71 billion for 2022, as per the Ghana Revenue Authority's 2022 annual report.
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The breakdown of tax contributions includes Corporate Income Tax (CIT) at GH¢1.27 billion (42.6%), Value Added Tax (VAT) at GH¢923 million, and Withholding Tax at GH¢697 million.
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Additionally, the Communication Service Tax amounts to GH¢511.6 million, while levies for GETFund, NHIS, and COVID-19 total GH¢768 million, among other contributions.
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Regarding the contentious Electronic Transfer Levy (E-Levy), the Chamber emphasized the need for further revision in the E-Levy rate to align it with the government's digital drive strategy.
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“Our recommendation to the Ministry of Finance is to consider reducing the levy on transfer to 0.5 per cent and introduce a 0.5 per cent levy on cash-outs among other proposals,” the GCT said.
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Highlighting the crucial role of the telecommunications sector in socio-economic development, the Ghana Chamber of Telecommunications stressed that it should not be taxed similarly to industries like alcohol and tobacco.
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Dr. Ashigbey, the Chamber's CEO, expressed concern that the amount paid to the government accounted for 46.31% of its revenue for the year, a slight decrease from 47.69% in 2021. This suggests an unsustainable burden that requires attention.
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Despite making a significant contribution of 2.27% to the country's Non-Oil GDP, the Chamber pointed out that the telecom industry bears a "disproportionate tax burden," contributing 7.28% to the government's overall tax revenue.
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“This inequitable differential militates against government’s effort to transform the nation’s economy and urged that the industry is viewed as partner rather than a pot of tax because elevated taxation levels have significantly impacted the industry.”
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Rather than being viewed as the "cash-cow" that is unduly taxed, he said, it was critical that the industry be seen as a key driver driving the development of other sectors including agriculture, education, health care, manufacturing, and government.
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