Telecom stakeholders call for rebalancing of taxes

Players in the telecommunications industry have highlighted the urgent need to rebalance taxes in the sector to promote digital inclusion, economic growth and fiscal stability in the economy.

According to them, the telecom industry is burdened with a lot of taxes that makes it difficult for the players to undertake investments in infrastructure to improve service delivery.

“…For every ¢100 that is paid to the operators within the industry, they pay back ¢48 in the form of direct and indirect taxes, as well as other remittances to government” Dr. Ing. Ashigbey said.

The Chief Executive of the Ghana Chamber of the Telecommunications explained that the remaining ¢52 goes into investment in people, the business, the supply chain, marketing, and general operations.

According to him, this makes it difficult to pay back dividends to shareholders which have become the real objective of businesses.

“…The less availability of funds means future investments are likely to suffer and this hurts the quality of the network and service delivery”.

Dr. Ashigbey averred that the industry thrives on huge annual capital expenditure that enables telecom operators to keep supporting the exponential growth in the network, product and services. He indicated that between 2020 and 2021, the Industry will invest over ¢3 billion in network and IS infrastructure expansion.

Despite this investment, Dr. Ashigbey believes collaboration between operators and the regulator is needed to resolve the data capacity challenge. This, he said, would include some policy and regulatory interventions.

Need to address permit challenges

Furthermore, Dr. Ashigbey bemoaned the bureaucracy involved in obtaining permits for the installation of towers in the country.

He hinted that his outfit will conduct a comparative study on the fees and permits charged the industry in Ghana compared to other African countries. The findings, he said, will aid policy on advancing the digital transformation drive as a country.

“A cursory look at the data show that we are more expensive compared to Uganda, Kenya, Nigeria, Burkina Faso and Niger. While most of them have a maximum 3 regulators and agencies they have to take permits from before the installation of towers, we have 5 agencies we have to deal with, with the very long lead time”.

Nevertheless, he expressed delight on the intentions of the Ministry of Communications and Digitalization to review telecommunication tower installation guidelines.

He is hopeful this will pave the way for a one stop shop for permitting and approval for tower installation.

Dr. Ashigbey further emphasized the need for more partnerships between the Chamber and the government to enhance the delivery of services to customers.  He noted that this partnership will help find solutions to the challenges facing the industry.

Improving tax revenue collection

Dr. Ashigbey also detailed that Mobile is the most cost-effective way of extending access to ICT and the internet in Ghana.

He said it contributes to driving the government’s digitization agenda adding that, it’s fundamental to helping the government position the economy as a smart and digital ready market towards further growth.

While the telecom industry feels its tax burden is outrageous, the President earlier this month revealed that about 60,000 professionals are not complying with tax laws. This results in tax evasion that robs the nation of huge revenues. As such, the Chamber’s call to rebalance taxes in the industry may not be out of place. However, it should be a wake-up for the GRA to find innovative means to improve the collection of personal income taxes whilst easing the burden on companies.

Luckily, the Assistant Commissioner of the Ghana Revenue Authority (GRA), Mr Dominic Naab, revealed on September 16, 2021 that some professionals who shirked their tax obligations have reached out to the Authority to perform their civic responsibility. This suggests that the President’s call is beginning to yield results. This further highlights the need for a collective effort to improve the country’s revenues.