The Ghana Chamber of Telecommunications has welcomed a promise by the government to reduce the cost of data if it is retained after the polls in December.
Over the weekend, the Vice President, Dr. Mahamudu Bawumia, said the government will cut down data cost by reducing taxes on digital devices, reducing spectrum and license costs for telcos, and reducing tariffs on making international calls.
The Chief Executive Officer of the Ghana Chamber of Telecommunications, Ken Ashigbey, speaking to Citi Business News, says implementation of the pledge would be a step in the right direction.
He stated that a reduction in the spectrum and license cost will create opportunities for network operators to expand their data speed.
“When the first 4G license was auctioned, it was only one network operator that went for it. And then the second time it was done, only one went for it. So some of the spectrum was not sold. I’m pretty sure that when we reduce the cost of all of this spectrum, it will be more affordable for the operators and the government will get revenue from them. It will be for the benefit of the economy, the citizenry, and all operators as well,” he stated.
“We believe strongly that looking at the issues of taxation, which is a major component of the cost of data, will really be of benefit to Ghana and we’ll be able to achieve that data-for-all and affordability elements within the issue of connectivity that we all desire.”
Mr. Ashigbey also said if implemented, the move will go a long way to improve the quality of the network Ghanaians use.
“Once you reduce the level of taxation, you allow for a lot more revenue so that more investments can be put back into the network to expand it. It’s not only just about the investment. The issues of fibre cuts also contribute to a lot of the disruptions that we see. Taking taxes off will make a lot more people come onto the network and create a lot of physical space for the network operators to plow back some of their profit to be able to invest a lot more into the network. It will rather improve the quality of the network and will also ensure that we’re able to expand these networks to areas that are underserved or not served at all. So I believe that if this reduction of taxes comes into place, it will rather improve the quality of the service,” he stated.
Reduction of CST
The Minister of Finance, Ken Ofori-Atta, had earlier stated that the government will reduce the Communication Service Tax (CST) also known as ‘Talk Tax’ from nine percent to five percent effective September 2020.
During his presentation of the 2020 mid-year budget review in Parliament, he stated that the reduction will help reduce the cost of communication services to the consumer as more people work remotely and utilize online services due to COVID-19.
Prior to this, the government had amended the CST Act, increasing the tax from six percent to nine percent. It took effect from October 1, 2019.
This led to increased agitation among many customers of mobile telecommunication companies since the telcos had changed the mode of deducting the talk tax.
But the Communications Ministry later directed the telcos to cease the upfront talk tax deductions.