Government is said to be keenly strategising on ways to rake in revenue by taxing Over-The-Top (OTT) digital services in the country.
Government’s decision to possibly tax OTT digital services follows the gradual moving away from traditional telecommunication services such as voice by telcos in the country, which is reducing government’s revenue.
Touching on the issues at the Mobile Technology for Development (MT4D) Conference, Minister for Communications and Digitalisation, Ursula Owusu-Ekuful hinted that stakeholders in the telecommunication sector, especially Mobile Network Operators (MNOs), will be engaged on how government can shore-up its revenue by taxing OTT.
“We are determined to accelerate the use of digital technology, applications and services at all levels, build and protect our digital infrastructure, and enhance capacity and digital skills acquisition of our youth. As you may be aware, it is only through tax revenue mobilisation that such investments and more can be funded.”
“Currently, government is losing huge revenues from the MNOs to OTT digital service providers as traditional sources of telecoms revenue like voice declines. It is important that we have a frank, open dialogue on this, and explore other sources of revenue within the digital services space to improve government domestic revenue mobilisation,” stated the Minister.
An over-the-top (OTT) digital service is a media service offered directly to telecommunication customer via the Internet. OTT bypasses cable, broadcast, and satellite television platforms.
Currently, many people are resorting to OTT communications to reduce communications expenses. With this, they are open to real-time communications solutions that operate over the Internet – such as WhatsApp, Zoom, Facebook, Skype and others.
Plans by government to possibly tax OTT services comes at a time the Ghana Chamber of Telecommunications has intensified its advocacy for the removal of the law that imposes a 19 cents per minute charge for inbound international calls on telecommunication companies.
Data from the Chamber has revealed that revenue accrued to the state and telecommunications companies, declined by over 200 percent in the last nine years since the introduction of the law. In 2010 revenue accrued stood about GH¢ 360 million, but that figure declined to some GH¢ 107 million in 2019.
The Chamber is therefore arguing that apart from the fact that the move fuels SIM Box fraud because some unscrupulous persons re-route these calls as local calls and benefit from them, the ever-changing lifestyle of telecom users is having a negative impact on revenue generation, as many telecommunication customers are resorting to OTT.