NewsWest AfricaGhana to remove import duties on smartphones, raise tobacco taxes

Fri,24Nov2017

Posted on Wednesday, 19 November 2014 17:35

Ghana to remove import duties on smartphones, raise tobacco taxes

By Dasmani Laary

Mobile phone penetration is high in Ghana, but smartphones account for only 15% of this penetration. Photo©ReutersImportation of smartphones into Ghana will be tax-free from next year, as the government intends to bridge the digital divide within the West African country, but consumers of tobacco will have to pay as high as 175% import duty.

 

The removal of import duties on smartphones is expected to increase mobile penetration in line with government's policy of bridging the digital divide within the country.

Import duties on smartphones will be removed in line with government policy of bridging the digital gap

"Import duties on smartphones will be removed in line with government policy of bridging the digital gap," the Minister of Finance, Seth Terkper told parliament on Wednesday at a presentation of the government's 2015 financial policy.

Communication is shifting from voice to data in Ghana and mobile data is projected to grow 6.3 times between 2013 and 2018.

Mobile phone penetration is high in Ghana, however, smartphones account for only 15% of this penetration.

It is anticipated that the upturn in smartphone penetration will increase revenue from Communication Service Tax, Value Added Tax and corporate taxes.

However, consumers of tobacco will have to endure exorbitant prices, as Terkper said Ghana's excise tax as a percentage of cigarette prices is one of the lowest in the sub region.

Excise duty rate on tobacco would therefore be increased from 150% to 175%.

It has been estimated that the excise tax as a percentage of retail price is 14%, while the African average for is 33 %.

"It has also been established that in order to reduce the consumption of tobacco and its related health hazards, excise tax should be 70% of the retail price," Terkper he added.



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