Ease tax burden on telcos — Chamber

The Ghana Chamber of Telecommunications (GCT) has made a passionate appeal to the government to reduce the tax burden on the operators to help stimulate growth and increase their contributions to national revenue.

The chamber believes the sector has been overburdened with taxes, making it difficult to promote digital inclusion and economic growth.

It said a reduction in the number and rate of the taxes would result in increased reinvestment to retool, expand network and create more jobs for the youth.

The Chief Executive Officer (CEO) of the GCT, Dr Kenneth Ashigbey, made the appeal at the 18th Knowledge Forum by the chamber in Accra.

Interdependence

 “Almost every other sector is dependent on our sector now. We can attest to the importance of the telecom sector to Ghana’s development and fiscal stability, both through its own contribution to economy and government revenue.

“The sector continues to support and catalyse other sectors such as banking, media, agriculture, education and creative arts, as well as facilitate social communication and stability,” Dr Ashigbey said.

Touching on the contributions of the sector to national revenue, the CEO said annual growth taxes paid had averaged 28 per cent since 2017.

He said taxes paid by the sector rose from GH¢1.7 billion in 2017 to GH¢2.2 billion in 2018 before peaking at GH¢3.2 billion in 2019.

In spite of the general increase in tax contribution, he said certain tax handles such as import duties had suffered continuous declines, requiring further analysis. 

Future investments

He noted that COVID-19 had affected foreign direct investment (FDI) inflows and investible funds of service providers to boost capacity, in spite of the growing demand for voice and data services.

That, he said, was coupled with the acceleration in demand resulting in a data capacity deficit and that the industry thrived on huge annual expenditure to keep supporting the exponential growth in the network, products and services.

Consequently, he said, over the next two years, the industry would invest close to GH¢3 billion in network infrastructure expansion to increase data capacity by about 60 per cent from 2.2 million terabytes per day to 3.6 million terabytes per day.

“The traffic is expected to grow to about five million terabytes per day in December 2021. However, we believe there is still a lot more to be done between operators and regulators to resolve data capacity challenges.

“This will include some policy and regulatory interventions,” he said.

source: graphiconline