Economic Crisis Hits Telecom Companies

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Charges Going Up

The Chief Executive Officer (CEO) of the Ghana Telecommunications Chamber, Kenneth Ashigbey, has said that the financial constraints brought on by government taxes and other levies, has called for the decision by Airtel-Tigo, MTN and Vodafone to increase tariffs.

According to the CEO, the telecommunication networks after the implementation of the newly re-calibrated VAT, NHIL and GETFUND levies, has no option than to push the cost effect to its customers.

Speaking on Citi FM, Mr.Ashigbey, explained further that the impact of government’s decision forced the telcos to adjust tariffs upward in order to stay competitive.

“The Telcos are just applying the law as it was passed in all their service… This is an industry that pays close to 40% of its turnover to the government in terms of taxes and fees in other forms”.

“The industry is highly taxed; you need to be able to be competitive as a business to be able to attract the capital and the investment to be able to expand the services, the under-served and unserved communities. You need to ensure the sustainability of the industry and also to contribute to the development of the country as an industry.”

Meanwhile, the Ghana Chamber of Telecommunications in a latest statement issued on behalf of its members; AirtelTigo, MTN and Vodafone notified its customers and the general public of tariff modifications following the implementation of the new tax laws.

According to the statement, the government as part of the 2018 mid-year review of the budget amended the Acts referenced above, which decoupled the GetFund and the National Health Insurance Levies from the Value Added Tax (VAT).

The objective was to “give effect to the conversion of NHIL and GETFL into levies that are not subject to the input-output mechanism, and delinking them from VAT by removing the option of input tax deductibility,” thereby giving both levies a unique and different legal identity and distinguished from VAT.

 

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