The Ghana Telecommunications Chamber is confident the black market for smart phones in the country will be dealt a significant blow with government’s plan to remove import duties on mobile devices.

The Finance Minister, Seth Terkper, announced the policy to remove import duties on smart phones when he presented the 2015 Budget to parliament last week.

"The companies that are registered to do this business [deal in smart phones]; who want to play by the rules, who want to pay their taxes, who hire people, they cannot compete against the black market", Chief Executive Officer of the Telecoms Chamber, Kwaku Sakyi-Addo notes.

With significantly low import duties across the sub region, some traders take advantage to import thousands of handsets from China and elsewhere through neighboring countries, such as Nigeria and Togo, and sell them at very low prices -- undercutting prices on the market.

The Telecoms Chamber believes this will make prices of the device competitive in Ghana and help deal with the black market challenge.

Mr Sakyi-Addo says the policy will significanlty boost government's effort to grow the formal sector.

He said with the removal of the taxes consumers would also be spared high cost of smart phones at registered shops across the country.

Mr Sakyi-Addo also sees the removal of the taxes on smart phones as a positive incentive towards bridging Ghana's digital divide.

"Right now it is only 15% of the population that have access to smart phones. That ought to change, that ought to grow", he said.

Government's plan to remove a 20% tax on smart phones importation it imposed few years ago is aimed among other things at increasing data usage and Internet penetration.

The move seems to be in response to a petiton by phone dealers to the Finance Ministry.

In October some importers of mobile phones and accessories presented a petition to the Ministry, citing increasing tax evasion through smugging of the handsets as one the negative impact the tax on mobile phones.

The policy which was presented to the legislators under a certificate of urgency should take effect soon.