A study carried out by Price Waterhouse Coopers (PwC) for the Ghana Telecoms Chamber indicates telecom operators in the country paid a total of GH¢1.05 billion in total taxes in 2014 alone.
This represents a magical increase over the GH¢1.04 billion the telcos paid in 2013, according to the study.
“This contribution forms 6.9% and 5.4% of the Government of Ghana’s tax revenues for the respective years,” the study observed.
The Total Tax Contribution of the Telecommunications Sector, is the first study carried out for the Telecoms Chamber by PwC. It covers all taxes paid in Ghana by the members of the Telecoms Chamber, namely MTN, Vodafone, Airtel, Tigo and Expressoas declared in response to a questionnaire completed by the members during a general survey conducted by PwC Ghana on behalf of the GCT.
The survey covered the tax years ended 31 December 2014 and 31 December 2013 with the years 2012 and 2011 being used for comparative analysis.
Find some highlights of the study results below:
The Total Tax Contribution (TTC) of the telecommunications sector measures the tax contribution that members of Ghana Chamber of Telecommunications (GCT) have made to the Government of Ghana.
Besides the tax contributions, the study covered other regulatory fees paid to government agencies, discretionary contributions like corporate social responsibility, employment trends and capital investments made by the members of the GCT.
Five members of the GCT were considered for the study.
The Total Tax Contribution methodology measures all taxes borne and collected by the members of GCT.
Total taxes borne are taxes which are a cost to the members when paid and affects their financial profitability.
Total taxes collected are taxes collected and administered on behalf of the government, which are not a direct cost to the members but are generated as a result of the member’s business activities and the activity of collection has cash flow implications to the members.
The mobile telecommunications sector has been one of the most vibrant sectors of the Ghana economy since its liberalisation in the early nineties. The study has gathered information about the industry’s tax contribution and overall enabling impact on the economy.
This should influence policy initiatives and regulatory responses which ensures that a healthy investment climate is maintained in the Ghanaian market to promote digital inclusion and a connected society.
The key themes and findings are:
· In 2014, the total taxes borne (including profit taxes such as Corporate Income Tax, National Fiscal Stabilisation Levy, people taxes, product taxes and property taxes) increased by 22% in cedi terms.
· The taxes collected was about 2.5 and 3.2 times the amount of taxes borne in 2014 and 2013 respectively. The members of the chamber contributed far more in other taxes paid to the national revenues than is recognised through profit taxes alone.
· Total taxes borne and total taxes collected resulted in a total tax of GHC1.04 billion and GH¢1.05 billion in 2013 and 2014 respectively from the sector. This contribution forms 6.9% and 5.4% of the Government of Ghana’s tax revenue (Ministry of Finance, 20141 and 20152 budget statements) for 2013 and 2014 respectively.