Telecos want import duties on handsets removed

Telecom companies have appealed to government to remove the 20 percent import tax on mobile handsets in order to make end-user telecom gadgets more affordable.

The President of Ghana Telecoms Chamber Kwaku-Sakyi Addo explained: “government should seriously consider removing the 20 per cent import duty on handsets; it will increase affordability of telecoms products; that, in turn, will lead to usage and will, increase tax revenue from Communication Service Tax.”

Prior to parliament imposing the import duties on telecom end-user devices, which basically include mobiles and other accessories, importation of mobile handsets into the country bore no import duties.

Despite strong resistance from industry stakeholders the law was passed. According to Mr. Sakyi-Addo whose Telecoms Chamber speaks for operators, “government must strike a careful, delicate balance between short-term tax demands with the longer-term potential for even greater tax revenues from enterprises/businesses that have become more efficient and grown on the back of this industry.”

“The current measure breeds corruption and smuggling and there’s a risk that projected revenues from this source will not be realised while access to telecoms products and its knock-on social and economic outcomes are stifled. Ghana, by the way, is only one of 20 countries in sub-Saharan Africa, that charges customs duties on mobile handsets.”

Data from industry regulator, National Communications Authority (NCA), point to over 100 percent SIM penetration though the figure is fraught with incidence of multiSIMing – a situation where phone users own more than a SIM.

A research published in the 2013 Mobile Economy report of GSMA, the global association of the mobile industry, puts the number of unique subscribers – or individual subscribers –in Ghana at 49.8 per cent; painting a brighter prospect for the sector.

However, for the sector to continue its tremendous rise, Mr. Sakyi-Addo said, government may have to reconsider its tax regime making it more favourable for telecom companies to flourish.

“There are other sector-specific taxes with sunset clauses, such as the five per cent fiscal stabilization levy. We hope and trust that as soon as the sun sets on those taxes, it will not rise again,” he said.

By Richard Annerquaye Abbey | B&FT Online | Ghana