Scrap Stabilization Levy On Banks & Telecos

Scrap-Stabilization.jpg

MTN Boss Tells Gov’t

Mobile Telephone Networks (MTN), has asked the government, to remove the stabilization levy imposed on selected sectors of the economy by the previous government, to ease the tax burden on businesses.

The levy, which was categorized by businesses as nuisance tax, was temporarily introduced by the Mahama government through the then Finance Minister, Seth Tekpe, for 18 months to stabilize the economy at the time, but has stayed more than two years.

He said, the levy coupled with others like unstable power led to the company “over overshooting our operating expenditure budget by more than Gh¢ 65million and that was as a result of the increases in electricity and diesel price in particular”.

The Chief Executive Officer (CEO) of MTN, Ebenezer Twum Asante, made the call when he interacted with the media, as part of the company’s annual stakeholders’ forum in Accra.

According to Mr. Twum Asante, businesses continue to struggle as the levy lingers on and pleaded that the government scraps it, since private sector businesses, are already over burdened.

“As the name suggests, is for stabilization and for how long is the country going to be on stabilization mode for which reason, some of us are going to pay over and above the mandatory taxes and levies and that is why, we continue to appeal to government for the past two years that, that should be considered.

And we are not saying this alone, all the banks and other related agencies, are asking for it to be waived. If there is any nuisance tax in our industry for me, it is the biggest one”, he said.

Some of the companies and organizations that fall under this levy are banks, insurance companies, telecommunication service providers, non-banking financial companies, shipping companies.

The forum which attracted major stakeholders in the telecommunication industry, senior editors and journalists from print, broadcast, online and so on, was to provide a stakeholder engagement and the performance of the company for the 2016 and the way forward.

Mr. Twum Asante said, in 2016, the company contributed 713 million worth of tax, amounting to 3.2 percent of the total revenue collected to government, as against Gh¢675.6million in 2015.

The company invested 16 percent of the revenue back into the company, disputing erroneous impression that, foreign companies most of the time ship their profits to parents companies abroad. “It is not true that MTN makes all the moneys and ships them abroad”, he argued.

MTN Ghana, which is the 4th largest MTN entity in Africa, was able to beat competition from its sister branches in Nigeria and South Africa, attributing the feat to three things, innovation drive saying, “I think the innovation culture of the MTN has really paid off.

The second, he argued was the decision to transform the business away from voice and data and then customer experience he emphasized.

Mr. Twum Asante said, “we placed a lot of emphasis on [customer experience] and the investment we have put behind the customer experience and when we talk about customer experience, it’s not only a mantra at MTN but you look at even the investment that we poured in 2016 $143 million, all went into network operation, network deployment, as well as network expansion, all to enhance the experience, we deliver to our customers.

According to the telecommunication giant’s financial statement for 2016, its revenue increased from GHc2.3 billion in 2015 to GHc2.7 billion in 2016.

From a humble beginning in 1999, where MTN started with a subscriber growth of 27, 000, the company now boasts a share of 19.2 million users of the network.

MTN, in the year under review, paid GHc1.1 billion to government in taxes and fees.

The break down are as follows, Ghc713 according to MTN went to the Ghana Revenue Authority (GRA), 51.8 million to the National Communications Authority (NCA)/GIFEC and the remaining GHc258 million went for the 4G, LTE and GHc85 million to SIIT

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