A new global benchmark study undertaken by accounting firm Deloitte LLP for the GSM Association (GSMA), indicates Ghanaian consumers are paying more taxes on mobile phone usage currently than they used to in 2007.
The study, “Global Mobile Tax Review 2011” released November 7, 2011 in the United Kingdom (UK), says Ghanaians are now (2011) paying 22.01% of tax as a proportion of the total cost of mobile ownership (TCMO) as compared to 17% in 2007, higher than the average percentage of 18.14.
The country’s taxes were also higher than the regional African average of 19.32%.
Ghanaian consumers are thus ranked as the 24th highest payers of taxes on mobile ownership globally, among the benchmark of 111 countries. The country’s position in Africa is however 10th.
Ghana placed 59 on the global rankings in the 2007 edition.
The top five countries that have the highest taxation as a proportion of mobile ownership are Turkey, Gabon, Pakistan, Greece and the Democratic Republic of Congo (“DRC”) and in each of these countries mobile specific taxation exists.
The mobile ownership taxation includes four cost components – Usage, Handset, Connection and Rental.
On countries that impose an airtime excise, the study with analysis from Deloitte, revealed that Ghanaian consumers pay 15% Valued Added Tax (VAT) and 6% on airtime excise.
The study nevertheless, said taxes on the cost of usage can represent a barrier to development of services, as they act to reduce usage by consumers. “This is particularly the case in developing countries, where lower income levels mean that taxation on usage may impact upon the adoption of mobile by consumers.”
According to the study, the tax component of the cost of a mobile handset in Ghana is 35%, above the global average of 23.29%, attributing the high share of tax on handset costs to the custom duties on imported handsets.
Also on mobile specific taxation (including import duties on handsets) as a proportion of TCMO, excluding VAT, it observed that Ghanaian consumers almost pay 7% (6.99%) of the TCMO.
It said mobile specific taxes discriminate mobile telephony against fixed telephony, while other services are often regressive in nature and may reduce both access to services and usage.
For corporate taxes, the study said all countries levy a corporate tax charge on mobile network operators’ (MNO) profits and the average corporation tax rate for all countries in the panel is 25%, compared to 28% in 2007.
Considering regional averages, the study shows Africa and Asia as the regions with the highest average corporation tax rates globally, while the lowest corporate tax rates were found in Central and Eastern Europe (at 16% and 23% respectively).
“In Africa, the average corporation tax rate has decreased slightly since 2007 from 32% to 29%, while in Asia the average corporation tax rate has decreased slightly from 30% in 2007 to 29%.”
In Ghana, corporate tax applying to MNOs is 24% compared to 40% in Bangladesh, DR Congo and Chad, who are charging the highest among the 111 countries.
Ghanaian consumers pay 21% tax as a proportion of the total cost of mobile usage (TCMU), which consists of rental and usage charges in Africa – above the regional average of 19.06%.
By Ekow Quandzie