A 20 Percent Tax on Mobile Phones: What is Ghana’s Parliament Thinking?

I am not Ghanian. I do not live in Ghana. So maybe I am missing something obvious. But I am very confused as to why Ghana’s Parliament passed a bill to re-impose a 20 percent on mobile telephone handsets.

Mobile Madness
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The mobile services industry is a modern day gold mine for the “Gold Coast” – according to the of Telecommunications, the mobile services sector has created over 1.5 million jobs in the country and the Ghana Statistical Service, the telecoms industry has been a key driver of economic growth, directly accounting for 7% of investments in Ghana, 10% of government income, and 2% of GDP.

And yet Ghana’s Parliament wants to kill this golden goose by raising prices 20% in a hunt for $50 million in government revenues. This is a good way to curtail the explosion in and the benefits it brings. As Emmanuel Dogbevi and Dode Seidu rightly point out:

The import tax clearly goes against one of the main drivers of mobile subscription growth in Africa: low-cost handsets coupled with pre-paid services have made ownership of mobile phones affordable. [...]

The import tax will also affect the communication ability of many Ghanaians. According to the African Mobile Observatory 2011, mobile services have become the primary means of voice communication for many of the inhabitants of Africa as the number of fixed-lines has stagnated or has not increased as mobile phones have. Hence mobile phones are the main communication tool available to many people.

Ghanians, please help me understand what the Parliament is thinking. Why are they so quick to tax such a economic and social cornerstone of Ghana’s development? What is this new tax, besides a naked grab for the wallets of Ghanians by the large taxpayer unit?


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