Alliance for Affordable Internet welcomes Ghanaian government’s moves to cut mobile phone taxes

Telecoms

The Alliance for Affordable Internet (A4AI) has welcomed Ghana’s commitment to scrap hefty import duties on smartphones. The Ghanaian government, which recently joined A4AI, has announced these first steps in an innovative drive to enable affordable Internet access through policy reform.

This step, confirmed in the 2015 Budget presented this week, was a key recommendation developed by A4AI-Ghana Multi-stakeholder coalition established earlier this year. Proposals to remove this duty were recommended by the A4AI Ghana Coalition Working Group on Taxation, led by Kwaku Saakyi-Addo, CEO of Telecoms Chamber. The elimination of the 20 percent import duty will reduce the cost of handsets in Ghana, where taxes make up approximately 35 percent of the cost of a smartphone. This will enable many more ordinary Ghanaians to afford smartphones that allow them to access the life-changing potential of the Web.

The announcement, delivered in the 2015 Budget, reads: “Mobile phone penetration is high in Ghana. However smartphones form only 15% of this penetration. Communication is shifting from voice to data and mobile data is projected to grow 6.3 times between 2013 and 2018. It is being proposed that in order to increase smartphone penetration, and in line with Government's policy of bridging the digital divide within the country, import duties on smartphones will be removed. It is expected that the increase in smartphone penetration will increase revenue from Communication Service Tax, VAT and corporate taxes.”

Welcoming the announcement, Sonia Jorge, the Executive Director of the Alliance for Affordable Internet said:

‘The removal of import taxes is a key first step towards getting every Ghanaian online. We are delighted that the Finance Ministry has listened to our Ghana coalition members who have advocated tirelessly for this reform. Taxes make up more than a third of the cost of a smartphone in Ghana, and as a result only about 15% of the population currently have one. It’s worth noting that when Kenya scrapped VAT on handsets in 2009, devices in circulation quadrupled and overall mobile penetration rose from 50% to more than 70%. We hope to see similar results in Ghana.’

Source: Press Release