Total taxes collected and payments made to government by telecommunication companies in Ghana amounted to GHc2.2 billion in 2018, data from the Ghana Chamber of Telecommunications (GCT) has revealed.
The total tax contribution (TTC), a methodology which was used by the GCT, measured the total tax cash payments made by members of the Chamber through their business operations. The TTC survey considers not only corporate income tax, but taxes borne and collected including employers’ social security contributions.
Addressing the media in Accra, GCT’s CEO, Mr Ken Ashigbey, indicated that Value Added Tax (VAT) stood as one of the major tax lines of the industry, representing approximately 19 percent of the TTC in money terms, this amounting to over GHc412 million.
This tax line, although a pass through cost, which can be passed on to final consumers, puts an administrative obligation on the telecoms companies to correctly administer, collect and pay it over to government.
Communication Service Tax (CST) contribution to the amount was valued at GHc420 million, representing 19 percent of the total.
Corporate Income Tax (CIT) relating to taxes borne by members of the Chamber represented 16 percent of the TTC in monetary terms amounting to GHc342 million.
Other products taxes, regulatory fees and the universal service fund, mainly consists of one percent annual net revenue, required to be the paid to the National Communications Authority on quarterly basis and an additional one percent of annual net revenue required to be paid into an electronic fund set up by the government (GIFEC) which was approximately GHc114 million.
These statutory payments according to Mr. Ashigbey, were based on the top line of the businesses and are payable whether a business makes a profit or not.
The survey indicates that a 0.07 percent tax contribution of mobile financial services (MFS) to the tax contribution is about GHc15.1 million and largely attributed to withholding taxes (WHT) paid from the commissions to merchants and MFS engagements with suppliers, distributors among others.
Other findings in the survey indicated that the telecoms industry directly employs approximately 6,500 people for whom Pay As You Earn (PAYE) on their behalf resulted in government receiving GHc64 million.
According to the Chamber, the TTC contributed over 6 percent of government of Ghana’s tax revenue for 2018. Whereas the TTC shows growth in mobile industry tax contribution compared to previous years which was up to GHc1.74 billion in 2017 from GHc1.05 billion in 2014 and GHc1.04 billion in 2013, there were marginal decreases observed on certain lines.