Ghana’s Telco Chamber calls for more dialogue on “talk tax” before it’s increased

He explained that this must be done so that the tax does not become counterproductive.

“Looking into the document I didn’t hear anything about implementation. That’s where sometimes the engagement with government is important. Because apart from the implementation time, you should bear in mind that the government would expect a marginal return on this increase to be positive.”

“But the elasticity of demand for telecommunication service is not inelastic. People are already complaining about the high incidence of taxes. The increase might result in decreased demand thereby affecting the projections for the CST,” he added.

His comment is coming after the Finance Minister, Ken Ofori-Atta, proposed that the communication tax be increased from 6% to 9%.

This is in an attempt to meet the government’s revised total revenue and grants target of GHC 58.9 billion while avoiding overtaxing its citizens. He also proposed the increase and scrapping of other taxes.

He made these proposals when he presented the 2019 mid-year budget on the floor of Parliament on Monday (July 29, 2019).

According to the Finance Minister, the increase of the communication tax to 9% will help in developing the foundation for the creation of a viable technology ecosystem in the country.