Ghana Levies 20% Tax On Mobile Phone Imports

Mobile phones in Ghana

VENTURES AFRICA – Parliament in the West African country of Ghana on last Friday passed the Customs and Excise (Duties and other Taxes) Amendment) Bill, 2013 to re-impose a 20 percent import duty on mobile telephone handsets - mobile, cellular and satellite phones.

The government says this tax is also meant to protect local manufacturers of mobile phone handsets and also increase government revenue. RLG Communications is Ghana’s foremost assembler of mobile phone handsets.

The same tax rate was imposed on plastic products coming into the country.

The government removed import duty on telephone sets a few years ago in a bid to reduce prices and to encourage usage.

The Finance Committee of parliament, the sub-committee that introduced the bill, claimed the reduction had not yielded the desired results as prices of telephone sets had increased over the period contrary to the government’s intention.

“There is, therefore, the need to reintroduce import tax on telephone sets to generate revenue and also create an even field for locally manufactured telephone handsets to favourably compete with imported ones”, the committee’s report said.

It is estimated that the imposition of the levy on telephone handsets for the remaining half of 2013 would accrue GH¢49.8 million ($24.5 million) while the tax on plastic products would yield GH¢26 million ($12.8 million).

The streets of Accra are littered with small business people retailing cheap imported mobile phones, mainly from China.

A lot of concern has been raised by the public in the past about fake imported phones into the country.

On the same day, the law-making body also passed the Value Added Tax (Amendment) Bill, 2013 to enable the VAT to cover the supply and import of telephone handsets.

The existing law was amended to exclude the application of the tax to imported telephone handsets but following the proposed imposition of a 20 percent import duty on telephone handsets, it became necessary to further amend the Act to apply to mobile handsets imported into the country.