20 November 2007
editorial
In his budget statement presented to Parliamanet last week Thursday, the Minister for Finance, Hon. Kwadwo Baah Wiredu stated that the government had decided to waive duties and VAT on all imported mobile phones and substitute them with excise duty on calls made by mobile phone subscribers.
The reason cited for the decision was that mobile phone importers through smuggling have been evading tax they ought to have paid to the state. With this new decision, the cost of mobile phones would become relatively cheaper on the market because the tax element has been removed. Since this announcement, there has been mixed reactions from the public, especially, mobile phone users.
In order to have an objective discussion on the subject, two critical issues must be considered. One, revenue mobilization and two, checking of smuggling.The finance minister in explaining the rationale behind the government's decision to tax users of mobile phones said most importers had evaded tax on phones in the past. If this was indeed so, The Chronicle then would like to submit that the government has got it all wrong.
Our government has a constitutional responsibility to mobilize revenue for the development of the country. It also has the backing of the law to ensure the interest of the country by arresting and prosecuting those who would try to cheat on the government or the state.
With the backing of the law, if people still evade tax, it means that government has failed to put the necessary mechanisms in place to check the practice. It is therefore the view of The Chronicle that government cannot pass on her inefficiencies to the public. The government has the security apparatus firmly in its control.If something goes wrong somewhere it should be the headache of the government and it should not try to pass such laxity on to the general public.
The Chronicle contends that if the only decision being taken by government is to tax users of mobile phones, then the whole idea must be shelved. Government must accept her guilt that it has failed to enforce our tax laws in the country after convincing Ghanaians that she was capable of handling all sectors of the economy.
On the other hand, if the idea was meant to generate more revenue, the government should be bold to tell Ghanaians. Taxes, all over the world are used in developing countries. Every government therefore has a responsibility to find new ways of generating revenue.
We are aware that the public has reacted negatively to the idea but we at The Chronicle believe that it is a good one that must not be thrown overboard. Considering the rate at which Ghanaians are using mobile phones, it would be prudent for subscribers to be taxed in order to generate more revenue for the country.
Ghanaians want almost everything but are always afraid to pay taxes. Europe and America have become what they are today because of taxes. They pay tax and then get the surplus to us in Africa in the form of aid or loans.
Why can't we also do same? Of course, in espousing this we are also mindful of the high unemployment rate in the country.
Besides, mobile phones are used in all corners of the country by both the rich and the poor. To impose tax on its usage would therefore bring untold hardship to those in the low-income bracket. We therefore propose that the first one or two minutes of talk time should be tax-free. Taxes should thereafter be imposed.
We also submit that the tax should not be uniform but rather be on the more-you-talk the more-you-pay basis. By so doing, it would save those in the low-income bracket any hardship as already suggested. If the person decides to talk beyond the grace period, then he or she is no more a low-income earner and should be prepared to pay the appropriate tax.
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