Data on the contribution of telecoms operators to
national development indicate that every years telcos pay GHC2.2 billion in
taxes, which is almost 9% of Ghana’s annual total revenue basket.
Out of the total, Communication Service Tax (CST)
tops with GHC420 million, following by Value Added Tax (VAT), GHC413 million;
Corporate Income Tax (CIT), GHC343 million, Withholding Tax (WHT), GHC293
million and Import Duties GHC180 million.
The rest are Surcharge on International Incoming
Traffic (SIIT) GHC155 million; SIIT is the quantum of six cents per every
minute of call that comes from overseas into the country. Telcos pay that to
the National Communications Authority (NCA), who are, by law, allowed to spend
it and report to the Finance Ministry.
There is also the pay-as-you-earn (PAYE) tax, which
stood at GHC64 million and finally the National Fiscal Stabilization Levy
(NFSL), which is GHC57million and paid by only MTN Ghana as the only telco that
makes profit after tax in Ghana so far.
NFSL was introduced in 2013 as a way of government
appealing to some leading companies in the country to help stabilize the
economy over a period of 18 months, ending December 2015. But successive
government keep renewing it.
MTN has been appealing for a relief from the NFSL
for many years now, but the current government has rather extended it for
another five years in their 2020 budget.
The telecoms chamber noted that, in spite of the
heavy tax burden, the telecom industry continues to commit investible funds
into capital expenditure to meet customer service quality and experience need.
Telcos provide 6,500 direct jobs, and over 1.6
million indirect jobs, contribute 2% of GDP, and invest GHC628 million capital
expenditure every year.
The Chamber however holds that some policy enabler
such as tax reforms to improve affordability of mobile technology and services
for customers, will yield greater strides for all stakeholders in the long-term
within the economy.
Currently, telcos in the country wield 37 million
active voice SIMs, out of which and whopping 26 million also do data and 13
million are mobile money customers. In terms of coverage, they 87% 2G, 85% 3G
and a meager 6% 4G.
This year, a chunk of the telecom spectra license
will expire and government will be giving them a renewal fee to pay if they
want to continue providing services in Ghana.
Already, some operators and other industry players
have invested heavily into 4G spectrum and are yet to recoup their investment,
as the market inches fast towards saturation level.
Industry players have always argued that the price
of spectrum, as it relates to the nature of the Ghanaian telecoms market,
population size and other factors, is very high. But the regulator has always
stood its grounds on maintaining the prices that telcos complain about.
The Telecom Chamber believes that going forward,
“appropriate spectrum management framework [by the industry regulator] will
provide needed clarity for more funding into existing and new technologies such
as 4G, which requires policy support to grow.
The Chamber is proposing a technology neutrality
policy, where telcos are allowed to re-farm existing used spectrum to deploy
higher technology, instead of always having to go buy new spectrum from
government to deploy new technology.
They believe that would allow telcos to invest their
scarce resources into deploying the technology to benefit all stakeholders,
including government, in the long-term, rather than paying huge onetime license
renewals fees to the state.
