Phone Dealers Kick Against 20% Tax

Mobile phone dealers in Accra have kicked against government's imposition of a 20 percent tax on the importation of mobile phones into the country.

Government intends to raise about GH¢49 million from the tax under a certificate of urgency in order to generate additional revenue to support its programmes.

At a press conference held yesterday in Accra, the mobile phone dealers called on government to scrap the tax.

Secretary of the 'Tip Toe Lane' Traders Association and spokesman for the Coalition of Mobile Phone Traders and Importers in Ghana, Simon Fiaku said, 'We are extremely concerned about the new 20 percent tax introduced because this will act as a big deterrent to the industry and result in major stakeholders shifting their focus from Ghana.'

He noted that the new tax has the potential of spurring significant increase in cross-border smuggling of mobile handsets.

'It will defeat the purpose of revenue generation by the government.

'It could equally deny consumers the opportunity of enjoying what they described as authentic products with the needed warranties as fake products may flood the market,' Chief Executive Officer (CEO) of Ericsther Phones Enterprise, one of the biggest mobile phone dealers and importers in Ghana, Eric Gyamfi told CITY & BUSINESS GUIDE.

Apart from that, he said the imposition of the tax could increase the cost of handsets and erode the gains made in mobile penetration in the country.

The President is expected to assent to its implementation after Parliament passed it recently.

'If government refuses to see the gravity of this issue and goes ahead to implement it, the consequences will hit them,' CEO of Ultimate Phones, Nana Kakra said, describing the tax as a wrong move.

He said 'as it stands now mobile phone dealers and importers in Ghana employ about 10 percent of the country's population and so you can imagine the number of people who will be affected if it is implemented.'

But Chairman of the Tip Toe Lane Traders Association, Joseph Osei Agyemang appealed to the Mahama administration to review the decision.

'We humbly request your Excellency to review the decision on the 20 percent import duty on mobile phones and open discussions with the mobile phone traders and importers in Ghana on other ways to help government to generate revenue within the industry,' he told the paper.

That, he said, was in view of the fact that they were not consulted before the introduction of the mobile phone tax.

Information gathered by the paper suggests that representatives of Samsung Mobile Phones are considering relocating their office from Ghana in view of the imposition of the tax.

The law  
On July 9, 2013, Parliament passed into law the Communication Service Tax (Amendment) Bill 2013, which also imposes a six percent per minute inter-connectivity charge to be paid by telecommunication service providers.

The inter-connection tax applies to calls from one network to another within the country.

The Act mandates the Minister for Finance to work with the Minister for Communications to establish a monitoring mechanism to verify the actual revenue that accrues to service providers for the purpose of computing taxes due the government.

Also known as 'Talk Tax', the Communications Service Tax was introduced by Government in 2008 to increase revenue by exacting six percent on the value of services accessed by subscribers of mobile telephone networks.

The amended bill is to clarify the scope and coverage of the tax and to include interconnection services within the tax base.

 By Charles Takyi-Boadu