It turns out that every time you buy airtime, a data bundle, or other services from any of the telecom companies in Ghana, the government takes a hefty cut!
For every ₵1 you spend, a whopping 54 pesewas goes straight to the state in the form of taxes, levies, and fees. That’s over half of your money right there!
Let’s break this down. According to the Ghana Chamber of Telecommunication Companies, 43% of their total revenue flows back to the government through taxes, levies, and fees. But wait, that’s not the full picture. Once you factor in import duties, taxes on remittances, and other additional charges, this shoots up to a staggering 53%!
In 2023 alone, the telecom industry contributed a massive ₵9.8 billion in revenue to the government. That’s a significant 30% jump from the ₵6 billion they paid the previous year. But the Chamber is concerned about this hefty tax burden, especially given the industry’s many other contributions to the economy.
Speaking at the launch of the Transparency Initiative Report on Thursday, November 14, 2024, the Chief Executive of the Chamber, Dr. Ing. Ken Ashigbey, laid it all out: “In terms of the taxes, the total contribution that the industry made, both in taxes that we collect, taxes that we bear, taxes that we collect on behalf of government, and other remittances to other allied agencies, was a total of almost 10 billion Ghana cedis.”
He continued “the interesting thing is that if you look at that in terms of every 1 cedi that you pay to any of the networks, about which if you look at the taxes that are related to revenue, about 43% of that goes back to the government in the forms of taxes, levies, and fees. And then if you add the other remittances, including import duties and all that, it moves to about 53%.”
But that’s not where the story ends. The telecom companies are not just tax contributors; they’re heavily invested in Ghana’s growth. On top of taxes, they inject millions of cedis into Corporate Social Responsibility (CSR) projects and invest billions in capital expenditure (Capex).
Beyond just paying their dues, these companies create an enabling environment for businesses of all sizes—from small and micro-enterprises to large-scale operations. According to Dr. Ashigbey, this ecosystem support is critical, and it’s time for the government to reconsider how heavily it taxes the sector.
“The telecom sector is the sector that provides the rails on which various other businesses, including large to micro companies rely,” he emphasized. “Then it is important that we check the way we tax the industry. We need to offer them spaces. Another thing is that beyond even the 9.8 billion taxes that were paid, for the past 10 years, from 2013 to 2023, over 18 billion cedis have been invested as capital expenditure in this particular industry.”
Dr. Ashigbey wrapped it up with a call to action “It is really important for the government to engage with the members of the Chamber, with other tax people, for us to find a proper way of making sure that the industry contributes to government fiscal space and contributes also to other spaces. Because you notice from the report that over ₵43 million was spent on CSR in the month alone.”
Given this case made by the chamber, the onus lies on the government to consider their pleas or otherwise. Despite the huge tax burden the sector claims, the total tax revenue of the country compared to the GDP has been very abysmal. As of 2022, Ghana’s tax-to-GDP was hovering around 13% while some of its peers were doing around 20%.
With this demand, the government is caught between a rock and a hard place whether to meet the demands of a very critical sector of the economy and disrupt its revenue stream or totally ignore the calls.
