CEO of the Ghana Chamber of Telecommunications (GCT), Dr. Ing. Ken Ashigbey, has revealed that the mobile industry made a total tax contribution of over GH¢3.6 billion to Ghana’s economy in 2020.
This was contained in the 2020 Total Tax Contribution Report. The report covers a study aimed at measuring the size of the contribution that members of GCT made to the government of Ghana during the 2020 fiscal year.
Speaking at a Knowledge Forum held at the Labadi Beach Hotel on Tuesday, Dr. Ashigbey said that this amount represents total taxes borne, collected and other payments and remittances made, to the central government and other allied agencies.
He explained that the mobile industry’s 2020 tax contribution made up about 8.5% of Ghana’s tax revenue for 2020, according to the 2020 budget statement of the Ministry of Finance.
“This contribution, analysts argue is rather conservative and does not take into consideration the inputs of other industry players in the study. It nevertheless demonstrates the importance of the mobile industry to the government’s tax revenue and national GDP and economic growth.”
Ing. Ashigbey also stated that, “trends of our TTC study over the last three years has shown continuous average annual growth of over 28%. From GH¢1.74bn in 2017, GH¢2.2bn in 2018, and GH¢3.2bn in 2019.”
Breaking down the total tax contribution, he said Corporate Income Tax, representing taxes borne by the eight members of the Chamber, namely; AirtelTigo, MTN, Vodafone, American Tower Company, Helios Towers, Huawei, Comsys and C-Squared, constituted the largest tax type.
“The general corporate income tax rate is 25% and the industry contributed in monetary terms, GH¢976 million, which represents approximately 26.8% of the TTC,” Mr Ashigbey noted.
He said Value Added Tax which is second largest, represented approximately, 15.1% of the TTC, in monetary terms, over GH¢550 million. Communications Service Tax also represented 14.5% of the TTC, in monetary terms, thus over GH¢525 million.
The GCT CEO stated that “Mobile financial services for the first time contributed a whopping 5.91% to the TTC, which in monetary terms is about GH¢215 million and largely attributed to Corporation Taxes and withholding taxes (WHT) paid from commissions to merchants and other engagements with suppliers, management services etc.”
Aside these, other product taxes, regulatory fees and the Universal Service Fund (USF), which mainly consist of the 1% annual net revenue, required to be paid to the National Communications Authority (NCA) on a quarterly basis and an additional 1% of total revenue required to be paid into an electronic fund set up by the government (GIFEC) was approximately 3.8% of the TTC, representing GH¢138 million.
According to Ing. Ashigbey, this contribution attests to the importance of the mobile sector and its role in Ghana’s economic and fiscal stability.
“The sector continues to support and catalyze other sectors such as banking, media, advertising, agriculture, health, education, creative arts as well as facilitating social and familial communication and stability,” he stated.
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