Telecommunication companies and their staff paid a total of GH¢1.05 billion in taxes in 2014, representing 5.4 per cent of national revenues in that year.
The 2014 figure was an improvement over the sector’s revenue contributions in 2013, which was GH¢1.03 billion or 6.9 per cent of government revenues for that year.
This came to light when the Ghana Chamber of Telecommunications (GCT), the umbrella body of telecom operators in the country, commissioned a special study into the total tax contribution of its members to national revenues in those two years.
The study was carried out by PwC, and aimed at quantifying the tax contributions of the six operators to national revenues.
A summary of the study released ahead of its launch said “although PwC Ghana has not audited the data, a general sense checking of figures has been carried out in accordance with understanding of the application of the tax laws.”
It explained that although the survey was based on 2014 and 2013, the preceding two years were used as based years for comparative analyses.
It mentioned corporate income tax, national fiscal stabilisation levy, people taxes, product taxes and property taxes as the kind of taxes the survey covered.
“The members of the chamber contributed far more in other taxes paid to the national revenues than is recognised through profit taxes alone,” the study said.
CST rises
The study showed a consistent increase in product taxes collected such as Communication Services Tax (CST) and Value-Added Tax (VAT).
CST is an industry specific tax introduced in 2008 to raise revenue from the communications services rendered by telecom operators to their customers.
The surveyed showed that payment of CST by telecom operators increased by over 57 per cent from 2012 to 2014.
“The increase relates to the growth of the telecoms sector over the period as well as changes in underlying laws governing the collection of taxes on voice and data service,” the study explained.
It also found that in 2013, for every GH¢8.35 of revenue generated by a telecommunication company, the customer paid GH¢2.8 in taxes – both borne and collected.
The total tax contribution per user measures how much each end user pays per cedi of revenue earned by members.
Capital expenditure declines
Although the tax contribution of the sector has been on the rise, the study found that there was a decline in capital expenditure by an average of 43 per cent between 2011 and 2013.
It attributed the decline to changes in legislation that “required telecommunications operators to divest their tower portfolios and the investment life cycles of the industry that requires high level of investment in capital in early years.”
“However, there was an increase in operating expenditures by 63 per cent between 2012 and 2013. The telecommunication operators are expected to incur additional costs of renting towers,” it added. — GB
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