Government fails to lift 20% tax on smart phones in Ghana

By Nana Appiah Acquaye, Accra, Ghana

The intention of the government of Ghana to scrap the 20 per cent tax on the importation of smart phones into the country announced by Finance Minister Seth Terkper during his presentation of the country’s 2015 Budge statement in November last year seems to be fading away gradually as the days goes by.

Checks conducted by Biztechafrica among mobile phone dealers in some parts of Accra reveal that the Ghana Revenue Authority at the various ports in the country continues to charge the 20% talk tax on imported smart phones into the country. Efforts on the part of these dealers to get a meaningful explanation as to why the tax is still being imposed on the phones from the Revenue Authorities have proved futile.

Government according the finance minister last year want to help increase smart phone penetration which is currently at 15 per cent in the country as part of its policy of bridging the digital divide. He mentioned that communication is currently shifting from voice to data and mobile data is projected to grow 6.3 times between 2013 and 2018 hence the need for the government to create the enabling environment for the realization of this development in the country. It is also expected that the increase in smart phone penetration will increase revenue from Communication Service Tax, VAT and corporate taxes.

But as laudable the intent of the government of Ghana is, its failure to ensure the realisation and the implementation of these aims will not only caused the penetration of smart phones in the country to cascade but will also hinder the growth of data usage which has been projected 6.3 times between 2013 and 2018.  And these can be confirmed by a GSMA Report on Digital Inclusion and mobile sector taxation in Ghana, which emphatically noted that taxation on the mobile sector is significant in Ghana, which creates barriers that prevent from accessing mobile services. According to the report the current tax structure in Ghana means that each component of owning and using a mobile phone is subjected to taxation, resulting in higher prices.

The reported further suggest that by reducing the affordability of devices, these taxes risk excluding many Ghanaians from the extensive benefits of mobile and mobile broadband and risk encouraging an illegal black market for handsets, with less expensive devices entering in from neighbouring countries.

“The customs duty on handset raises the cost of ownership, and it can therefore lead to the exclusion of many Ghanaians from the benefits of mobile and internet access. Furthermore, it does not account for the positive externalities that mobile services create in the wider economy and regressive, hitting poorer consumers harder,” it added.

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