Chief Executive Officer (CEO) of Vodafone Ghana, Patricia Obo-Nai, has averred that 20 percent of every cedi taken from customers as payment for the provision of services by the operator goes to government in the form of taxes.
This is aside the other taxes paid by the telecom giant in the form of import duties on equipment shipped into the country, corporate income tax among other taxes.
“Twenty percent (20%) of every cedi taken from a customer goes into taxes, and it has nothing to do with import taxes and the other taxes that we have to pay. After that, the company also has to look at employing people and running the network.”
“Whether a customer makes a call or not the network runs, and so there are so much costs that goes into the industry that any help we get to drop our cost of operations is going to be passed onto consumers as benefits,” she posited.
Mrs Obo-Nai made the assertion speaking in an interview on the Chamber Dialogue hosted by Derek Laryea, Head of Research & Communications at the Ghana Chamber of Telecommunications and monitored by norvanreports.
The Chamber Dialogue is a flagship initiative of the Ghana Chamber of Telecommunications in which the Chamber discusses with stakeholders issues relating to the country’s telecom industry.
Must Read: Ghana to benefit from IMF’s $650 billion SDR for Covid vaccines
The Chamber has often asserted that telecommunication companies in the country are overburdened with taxes and levies from government.
According to the Chamber, for every voice call made, 50 per cent of the call rate/cost goes to the government as taxes and levies among other charges making call rates or charges expensive for phone users as well as making the cost of operations of telecos overbearing.
A recent report findings from a Total Tax Contribution (TTC) survey by the Chamber noted that the sector’s total taxes and payments to government amounted to over Ghs 3.2 billion in 2019, representing approximately 9 percent of Ghana’s annual total tax revenue earnings in the said year.
Key highlights from the report shows that for 2019, Communication Service Tax (CST) was GH¢414 million, Value Added Tax (VAT) was GH¢480 million, Corporate Income Tax (CIT) stood at GH¢832 million, Withholding Tax (WHT) was GH¢415 million, Import Duties stood at GH¢210 million and National Fiscal Stabilization Levy (NFSL) cost the members GH¢71 million.
The Surcharge on International Incoming Traffic (SIIT), which is the quantum of six cents per every minute of call that comes from overseas into the country, also amounted to GH¢107 million in 2019.
The Pay-As-You-Earn (PAYE) tax stood at GH¢96 million and finally the National Fiscal Stabilisation Levy (NFSL), stood at GH¢71 million.
The study further showed that the mobile industry widely provides 6,700 direct jobs and over 1.8 million indirect jobs, contributing 2.93 percent to (Non-oil) GDP, and invested GH¢1.55 billion in capital expenditure within the fiscal year 2019.
Touching on other issues such as mobile penetration in the country during the interview, Mrs Obo-Nai intimated that mobile penetration in the country should have been much higher than it presently is.
This Also: BoG issues directives for treatment of captured payment cards in ATMs
As at January this year, mobile penetration in the country hovered around 132.8 percent of the total population translating into some 41.69 million mobile connections in the country.
“Mobile penetration should have been higher than it is today, in terms of coverage we should have covered more towns and villages than we have done presently,” she stated.
“We pride ourselves saying mobile penetration is 132 percent but think about the unique number of people who have access to mobile phones and that’s just about 55-60 percent of the population. So there are quite a number of people who don’t have coverage and access to mobile phones,” she added.
She also spoke about the need to have more flexibility with regards to access to spectrum in the country, asserting current regulations do not make room for the needed flexibility and also adds to costs of operation.
“Some of the challenges we face as operators is access to spectrum which helps us reduce our cost, and we are looking forward to an opportunity where spectrum will become more available. We have it but the way we have licensed it makes it a bit more difficult to have some flexibility around it,” she opined.
