According to the Chamber, the sector’s total taxes and payments to government amounted to GHC2.2 billion in 2018.
The Chamber used a total tax contribution methodology to measure total cash payments for business operations by its members over the period.
Tax components include corporate income tax, Value Added Taxes, Communication Service Tax, withholding taxes, and Import duties and other surcharges, and social security contributions.
The total contributions of GHC 2.2 billion represent approximately 9 percent of Ghana’s annual total tax revenue earnings.
The CEO of the Telecoms Chamber, Ken Ashigbey revealed the figures at a media briefing.
Breakdown of Tax Components
From the data, Communication Service tax (CST) tops tax contributions with GHC420 million, averaging 19 percent of the total contribution.
Secondly, the Value Added Tax (VAT) contributes GHC413 million, averaging 18 percent of total contributions.
Also, Corporate Taxes are in third place with a total of GHC343 representing approximately 16 percent of the total contribution. Then, another tax component with notable contribution is the Surcharge on International Incoming Traffic (SIIT) with contribution of GHC155 million. The SIIT is the total value of six cents per every minute of call that comes from overseas into the country.
Additionally, other products taxes, regulatory fees and the universal service fund, mainly consists of one percent of annual net revenue. Telecom operators usually pay such fees to the National Communications Authority on quarterly basis. They also pay an additional one percent of annual net revenue into an electronic fund set up by the government (GIFEC). The total contribution of these fees for the period was approximately GHc114 million.
Statutory payments according to Mr Ashigbey, are based on businesses operations and are payable whether a business makes profit or not.
The survey also states that the total 0.07 percent tax contribution of mobile financial services (MFS) to the tax contribution is about GHc15.1 million. These are mostly withholding taxes (WHT) on commissions to merchants and MFS engagements with suppliers, distributors among others.
The findings further indicate that the telecoms industry has about 6,500 employees. Also, government receives approximately GHC64 million Pay As You Earn taxes from operators annually.