Ghana cancels plans to scrap 20% smartphone tax

5 Feb 2016

State plans to abolish a 20% import duty tax on smartphones have been withdrawn, according to Citi Business News. As previously reported by TeleGeography’s CommsUpdate, in December 2014 the government of Ghana announced the tax removal measures as part of its 2015 budget, seeking to bridge the digital divide within the country; however, the move was never enforced. Checks by Citi Business News in mid-2015 revealed the state had upheld the tax due to the introduction of Economic Community of West African States (ECOWAS) common external tariffs (CET). Principal Economic Officer at Ghana’s Ministry of Finance, Benjamin Ayesu Kwafo, has now reportedly confirmed that the government has not cancelled the tax but instead reduced the rate from 20% to 10%, saying: ‘The idea was to reduce taxes on smartphones because we needed to promote mobile phone penetration … But we realised that the CET had 10% so there was no need cancelling it and re-introduc[ing] again. So we decided to maintain it.’

As noted in TeleGeography’s GlobalComms, in 2008 the government removed import duties on mobile handsets in order to encourage usage, although the Finance Committee argued that the move did not yield the projected results since the price of handsets actually increased over the period. Subsequently, the Customs and Excise Amendment Bill that re-introduced the 20% import duty was enacted in July 2013.