Mobile operators plan alternative to 'talk time tax'

Mobile phone service operators in the country are meeting later this week to agree on alternatives to the proposed airtime levies on mobile calls.

Chief Executive of Onetouch Philip Sowah told The Statesman that the operators had failed to agree on alternatives to the proposed airtime taxes at an earlier meeting.

He said after their deliberations this week, the operators, Onetouch, Tigo, Kasapa and MTN will also engage the Parliamentary Select Committee on Communications to make a case on how the imposition of taxes on airtime calls will affect their businesses.

Finance Minister Kwadwo Baah-Wiredu in his Budget presentation last week announced that government will beginning next year abolish import duty and VAT on all mobile phones imported into the country and instead, levy taxes on every minute of airtime a mobile phone user spends on calls made.

"Government has decided to abolish import duty and import VAT on all mobile phones imported into the country and introduced a more effective means of taxing mobile phone usage. Consequently, Government proposes to impose a specific excise duty per minute of airtime use,” Finance Minister Kwadwo Baah-Wiredu.

But according to the Onetouch boss, “levies on airtime calls will significantly affect free time calls and reduced call charges”.

Hopeful of the outcome of their planned meeting later this week, Mr Sowah said “we hope to engage government in a non confrontational way to make presentations on how levies on airtime calls will affect our operations”.

“We will also make suggestions and present alternatives on ways to assist government in raising revenues through taxes”, adding that “our engagement with government after our meeting is solely to convince government to reconsider its proposed decision to impose taxes on airtime calls”, he said in telephone interview.

According to him, since subscribers are aware of the cost of every minute of airtime calls, additional cost to the consumer or reduction of airtime minutes per call is likely to trigger a backlash from the subscriber, which will affect the profit margin of the operators.

When asked about the suggestions and workable alternatives the operators are likely to present to government, Mr Sowah declined comment, saying “that will be known after our meeting later this week”.

Businesses will also be affected since more has to be paid for very minute of call or less time call for a minute charge before the imposition of taxes.

Dubbed “Brighter Future Budget” by Government and “Ye wuo-oh!” (We're dead!) budget by the Opposition, the Minister"s proposal is part of plans to raise a whopping GH¢ 7.1 billion for government business next year.

But Ranking Member on Finance, Benjamin Kumbour would have no taxes levied on airtime calls and promises to resist its implementation.

“The excise duty imposed on airtime will simply make it impossible for people to have fair access to the mobile telecommunication technology. This is retrogression on our international commitment than a bright future as it was and we will fight it from the beginning to the end,” he gave notice.

“Government should let the price of mobile phones remain the way it is and find ways of dealing with the problem of tax evasion on mobile phones. It should find an alternative approach to help it monitor and collect tax on imported mobile phones rather than imposing tax on the general population. This is a regrettable policy initiative and must be stopped,” Dr Kunbuor stressed.