9% talk tax: Multinationals may relocate investments - Ken Ashigbey

9% talk tax: Multinationals may relocate investments - Ken Ashigbey
Source: Ghana |Myjoyonline.com | Akyena Brantuo | benjamin.brantuo@myjoyonline.com
Date: 25-09-2019 Time: 10:09:07:am
Ken Ashigbey

The Chief Executive Officer of the Ghana Chamber of Telecommunications has cautioned government against overburdening players in the communication industry with taxes.

Speaking on the Am Show Wednesday, Kenneth Ashigbey, said the industry is already reeling under deflationary pressure due to intense competition. 

According to him, more taxes may only force the multinationals to invest in jurisdictions where the tax regimes are friendlier.

“If you do the computations, the industry is under a lot of taxes; corporate taxes, then there is the stabilisation levy as well. The sector is paying above 44%.

“We should bear in mind that when it comes to telecommunication, it is big cash. 

“There are a lot of multinationals involved. People are sitting somewhere globally and making decisions.

“So If I am making a decision to come to Ghana where over 44% of my investments will go into taxes then I may go into another country where the taxes are, say, 20%,” he told Roland Walker, host of the Show.

Finance Minister, Ken Ofori-Atta, in the 2019 Supplementary Budget, announced an increase in the Communication Service Tax from 6 to 9 per cent. 
According to the Finance Minister, the increment was to help develop the foundation for a viable technological ecosystem in the county. 

Responding, the telecommunication service providers said in a statement that they will begin charging customers the revised Communication Service Tax (CST) from October 1, 2019.

The Ghana Chamber of Telecommunications, authors of the statement, said “As intended, the incidence of the modification will thus be on consumers. It will impact the cost of telecommunication services.”

Explaining how the increment will impact the consumer, Kenneth Ashigbey said for every ¢1 of recharge purchased, a 9% CST fee will be charged leaving ¢0.93 for the purchase of products and services.

According to him, this is coming at a time the industry is under intense competition to introduce new technologies such as 5G and expanding their infrastructure to cover areas without coverages.

Mr Ashigbey has called for dialogue between the government and the stakeholders in the industry, to find a middle ground to meet the government’s revenue expectations as well as those of the telecommunication firms.

He says that such a platform will provide solutions for third party agencies in the communications sector, who are not paying taxes under the current tax regime, to do so. 

Referring to google, twitter and other social media networking websites, he said they make several dollars using the platforms provided by the telecommunication networks without paying any tax.