Business General

‘Talk tax’ increment a lazy approach – Kofi Kapito

The Chief Executive Officer for the Consumer Protection Agency, Kofi Kapito has expressed reservations about government’s decision to increase the communication service tax from 6% to 9%.

Describing the decision as a lazy man’s approach, Mr. Kapito said government could have resorted to other options of maximizing revenue.

“It is a sad day for consumers in Ghana, especially consumers of telecommunications and consumers that are impacted with the new levy. We are talking about expanding the digital age, so it should be affordable rather than being expensive.”

“Last year, it came out that in terms of data, Ghana stands out as one of the most expensive data countries in the world so how are we going to catch up with the rest of the world? I think that it is a lazy man’s approach. There are so many ways government can maximize taxes to increase revenue,” Mr. Kapito said on Eyewitness News.

Chief Executive Officer for the Ghana Chamber of Telecommunications, Ken Ashigbey also described government’s decision as surprising.

According to him, unlike past situations, extensive consultations were not held before such a decision was made.

“What has happened for this government is that before the reading of the budget or mid-year budget review, there is normally an engagement. There is a forum called the tax dialogue where Ministry of Finance, GRA and the tax consultants, we all sit together [to hold consultations]. This did not happen before this mid year review so for us this came as a surprise. We were not expecting communication tax to go up.”

The Minister in justifying the need for the increase said it was to create a viable technology ecosystem in the country.

Government proposes to increase the tax to nine percent to develop the foundation for the creation of a viable technology ecosystem in the country. This will comprise amongst others putting in systems to identify and combat cybercrime, protect users of information technology and combat money laundering and other financial crimes. The increase will not be earmarked, however, the sharing ratio will be adjusted in such a manner that the national youth employment programmes continue to receive the same proportions as they are currently receiving,” the minister said.

The tax which was introduced in 2008 is charged on the use of communication services in the country including voice calls.

Data from the Ministry of Finance showed that in 2018, the government accrued GH¢420 million from the tax.

The amount represented a 27.7 per cent increase from what was accrued to the state in 2017.

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