Telecoms operators and other corporate organisations are kicking against the 5% National Fiscal Stabilisation Levy and have appealed to the new government to scrap it from its first budget.
Opposition to the tax stems from the argument that it has outlived its purpose and is now hurting the bottomline of businesses.
President John Dramani Mahama’s government introduced the NFSL on July 15, 2013 to help reduce Ghana’s growing deficit. It was pegged at five per cent of the accounting profits of specified companies and institutions.
The categories of companies selected to pay this special tax include telecom service providers, banks, (excluding rural and community banks) non-banking financial institutions, insurance companies, breweries, inspection and valuation companies, companies providing mining support services, as well as shipping lines, maritime and airport terminals.
The levy was expected to last for 18 months (ending January 2015) however the companies are still paying the tax.
Moreover, the new Finance Minister Ken Ofori-Atta has promised to get rid of all “nuisance taxes” in the country, and the payers of the NFSL expect that it will be included because it is a nuisance.
“We expect the new Finance Minister, Ken Ofori-Atta to announce in this year’s budget that the NFSL is finally out,” one telco CEO said.
Meanwhile, months ago, CEO of MTN Ghana, Ebenezer Twum Asante, said when the NFSL was introduced, the selected organizations were happy to pay because it was to help stabilize the economy.
He noted that on two previous occasions, the issue of waiving it was mentioned in the former president’s state of the nation address but no action was taken and so the affected companies continue to pay.
“But we continue to do so at the expense of our own reinvestments and payment of dividends to our shareholders so we believe it is time for the government to start a discussion on how to wave it,” he said.
Ebenezer Asante said the NFSL has overrun the period set for it to last for, and because the affected companies did not expect it to go beyond 18 months, it is now beginning to impact plans for expansion and more reinvestments.
“We were expecting the government to wave it latest by this year so that we can go back to our mandatory taxes, duties, and levies which we are very happy to continue paying,” he said.
The MTN boss said telcos and other corporate institutions will continue to engage government on this matter and other related matters to ensure the best for the country.