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Tax Telecoms paid GHC1.05 billion total taxes in 2014-- Study

This contribution forms 6.9% and 5.4% of the Government of Ghana’s tax revenue for 2013 and 2014 respectively, according the Ministry of Finance’s budget statement in 2014 and 2015.

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A study carried out by Price Waterhouse Coopers (PwC) for the Ghana Chamber of Telecommunications (GCT) indicates telecom operators in the country paid a total of GHC1.05 billion in total taxes in 2014 alone.  This represents an increase over the GHC1.04 billion the telcos paid in 2013, according to the study.

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 study said.

While taxes collected was about 2.5 and 3.2 times the amount of taxes borne in 2014 and 2013 respectively.

This contribution forms 6.9% and 5.4% of the Government of Ghana’s tax revenue for 2013 and 2014 respectively, according the Ministry of Finance’s budget statement in 2014 and 2015.

Product taxes and regulatory fees paid to regulatory agencies together constitute the largest type of tax payment, the study also revealed.

The study continues to show an increase in product taxes collected such as Communication Services Tax (CST) and Value-Added Tax (VAT).

The CST paid by members increased by over 57% from 2012 to 2014. The increase relates to the growth of the telecoms sector over the period as well as changes in underlying laws governing the collection of taxes on voice and data service, the study said.

Overall, the study noted, there was a decline in capital expenditure by an average of 43% between 2011 and 2013.

According to the study, the decline may be attributed to changes in legislation that required telecommunications operators to divest their tower portfolios and the investment life cycles of the industry that requires high level of investment in capital in early years.

However, there was an increase in operating expenditures by 63% between 2012 and 2013. The telecommunication operators are expected to incur additional costs of renting towers, the study said.

The total tax contribution per user measures how much each end user pays per cedi of revenue earned by members. In 2013, for every GHC8.35 of revenue generated by a telecommunication entity, the customer paid GHC2.8 in taxes – both borne and collected.

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