New Phone Tax Out

Government says it will enact a law that will bar mobile telephony providers from passing the cost of excise tax imposed on them to subscribers or customers.

Government last Thursday announced in the 2008 budget that it would abolish import duty and import VAT on all mobile phones imported into the country and rather introduce a specific excise duty per minute of airtime use that will enable it rope in more revenue.

The decision has sparked dissatisfaction among Ghanaians with some saying the cost will be passed onto them by the mobile telephony companies.

But government spokesman on Finance and Economy, Kwaku Kwateng told CITY & BUSINESS GUIDE that the decision by government is part of several efforts to shore up the country's revenue.

He pointed out that the abolishment of import duty and import VAT on all mobile phones imported into the country could reduce cost of mobile phone sale in the country.

Government has been looking at ways of improving its revenue in order to decrease its fiscal deficit, hence the move could be seen as a welcome decision since there is the belief that adequate resources could be mobilized from the mobile service providers.

The mobile service providers are also seen by market watchers as making huge sums of monies from their subscribers. Therefore the specific excise duty is expected to provide a more effective means of taxing the mobile phone usage.

In a related development, the Commissioner of CEPS, Emmanuel Doku Nartey has okayed the decision by government to get rid of import duty and import VAT on all mobile phones imported into the country and rather introduce a specific excise duty per minute of airtime use that will enable it rope in more revenue.

He told CITY & BUSINESSGUIDE that the abolishment will shore up the country's revenue since all mobile phone usages may not dodge the levy.

By Charles Nixon Yeboah