MTN Pushes For Scrapping Of Stabilisation Levy From 2018 Budget
MTN is urging government not to extend the National Fiscal Stabilisation Levy (NFSL) in the 2018 Budget Statement, which will be read on Wednesday.
The five percent NFSL, payable quarterly, was introduced in 2009 but was abolished in January 2012. It was reintroduced on September 30, 2013, by ACT 862, and subsequently amended to end in December 2017.
It was imposed on banks, excluding rural and community banks)
Non-Bank Financial Institutions, Insurance companies, Telecommunications companies liable to collect and pay the Communications Service Tax, Breweries, Inspection and valuation companies, Companies providing mining support services, Shipping lines, as well as maritime and airport terminals.
In the telecommunications industry, MTN Ghana is the only operator which pays the levy since the other Telcos do not make or declare any profit.
In response to a questionnaire from Adom News, MTN disclosed that between 2013 and now, it has paid a total of ¢134,081,000 and it projects an additional ¢49.855million to hit ¢159 million by close of this year.
In 2013 MTN paid ¢11,597,000; 2014 - ¢25,441,000; 2015 - ¢31,150,000; and in 2016 it paid ¢41,023,000
MTN, therefore, thinks the levy should be removed from the 2018 budget, firstly because by law, it would have outlived its purpose by close of 2017, and secondly, it hampers MTN’s growth in its operations and increases its tax burden.
"The NFSL has overrun the period set for it to last for, and because the affected companies did not expect it to go beyond 18 months, it is now beginning to impact plans for expansion and more reinvestments," MTN said.
The telecoms market leader also noted that removing the NFSL would be consistent with the Minister of Finance’s promise to get rid of all nuisance taxes.
The company said the continuous stay of the levy in the budget beyond December 2017 would be unfair to MTN because it is the only telco that pays and it is affecting its level of commitment to invest in the network for future expansion which contributes to the development of the telecoms industry in Ghana.
"MTN could use the freed up money for further network expansion to the rural areas which are unserved or underserved, or it could be invested in additional CSR projects in deprived communities," it said.
The telcos giant said if the levy remains in the budget to be read tomorrow, it would take the matter up with Parliament’s Select Committee on Finance and Communications.