Telecom operators in Africa are advocating lower taxes as a way to expand services and bring about faster economic growth on the continent.
Mr. Chris Gabriel, Chief Executive Officer of Zain Africa, said research had shown that for every 10 per cent in telecom penetration there was 1.2 per cent growth in Gross Domestic Product in the medium to long term.
�African governments and industry regulators must shift their focus from the short-term gains from heavy taxation on telecom operators and focus on the medium and long term development impact of telecom on their countries,� he said during his presentation at the opening of the Telecom World Africa Conference 2009 in Cape Town, South Africa.
In Ghana, telecom operators pay over 28 per cent taxes on their annual profits, beside duties and tariffs on importation of telecom equipment. Taxes on the importation of handsets have also been replaced with communications service tax, otherwise known as talk tax.
Some service providers have absorbed that talk tax, whiles others have passed it on to their customers, making call tariffs higher than usual.
Operators are questioning the rationale for the talk tax, describing it as counterproductive and calling for a possible abrogation.
In terms of licensing, operators pay money to the regulator for every new technology, like third generation technology and additional network codes. Recently, MTN Ghana paid one million dollars for a second network prefix, 054.
Operators also pay money for permits to mount their masts at identified locations, plus rent money to owners of such locations.
There is also the Ghana Investment Fund for Electronic Communication (GIFEC), into which operators contribute a mandatory one per cent of their profits to provide telecom masts for co-location, internet connectivity, community phones, and power sources to un-served and under-served communities.
Operators in Ghana and across Africa are being urged to spread their services to rural communities to cover the un-served and under-served populations.
Operators, investors and regulators are attending the conference, organised by Terrapinn Limited under the theme �Opportunity, Innovation and Strategy for Fixed and Mobile Operators and Investors.�
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