Ghana Cutting Smartphpone Import Taxes To Get More Citizens Online

Ghana Cutting Smartphpone Import Taxes To Get More Citizens Online

Ghana says it will eliminate smartphone import taxes, a first step toward enabling affordable Internet access through policy reform, ITNewsAfrica reports.

The government plans to get rid of a 20-percent import tax on mobile devices, making it more affordable for citizens to buy smartphones, according to the report.

Eliminating the 20-percent import tax will reduce the cost of handsets in Ghana, where taxes make up about 35 percent of the cost of a smartphone, according to Telecompaper.

If the plan to lower taxes works the way it has been proposed, there’ll be an increase in smartphone penetration, which will increase revenue from Ghana’s communication service taxes, VAT and corporate taxes.

The Ghanian government confirmed the tax elimination in its 2015 budget. The announcement is a first step in a drive to enable affordable Internet access through policy reform, ITNewsAfrica reports.

“Communication is shifting from voice to data and mobile data is projected to grow 6.3 times between 2013 and 2018,” the Ghanian government said in a statement. “It is being proposed that in order to increase smartphone penetration, and in line with government’s policy of bridging the digital divide within the country, import duties on smartphones will be essentially removed. It is expected that the increase in smartphone penetration will increase revenue from Communication Service Tax, VAT and corporate taxes.”

Ghana’s commitment to abolish pricey import duties on smartphones was based on a recommendation by the Alliance for Affordable Internet, or A4AI, the report said.

A4AI is a multi-stakeholder coalition based in Washington, D.C., established earlier this year. It has offices in Cape Town and London. In addition to Ghana, the organization has memos of understanding with Nigeria, Mozambique and Dominican Republic, according to its website.

The Alliance for Affordable Internet Ghana Coalition Working Group on Taxation is led by Kwaku Saakyi-Addo, CEO of Telecoms Chamber.

This will be the first step to get Ghanian citizens online, said Sonia Jorge, executive director of the Alliance for Affordable Internet, in the report.