Airtime tax, bold initiative-Akomea

Page 49, Dec 20, 2007
Story: Emmanuel Adu-Gyamerah
THE Minister of Manpower Development, Youth and Employment, Nana Akomea, has said the 1GHp airtime tax is a bold initiative by the government in the effort to provide jobs, especially for the teeming youth of the country.
Speaking to the Daily Graphic on Monday, Nana Akomea said cell phone service providers and the general public should not have any fears about the impact of the tax.
The minister said the tax, being a levy on talk or phone usage, would nominally fall on consumers and not the service providers, at least in the first instance, but added that the tax would not be an intolerable burden on consumers.
Nana Akomea, who is also the Member of Parliament (MP) for Okaikoi South, said all over the world the trend had been for cell phone rates or call costs to fall, as a result of constant improvement in communications technology and infrastructure, as well as competition.
“In Ghana, for example, a mobile phone chip in 2000 (just seven years ago) was ¢1.2 million. Today, it is virtually free. Airtime cost or cost per minute in 2005 was ¢2,300. Just two years later, cost per minute is ¢1,400, a saving of ¢900 to the consumer,” he explained.
Nana Akomea said with the installation and availability next year of fibre optic backbone, on which the government had invested about $150 million, the cost of technology would be much cheaper to reflect in the cost to consumers.
So with proper monitoring by the National Communications Authority (NCA), airtime cost per minute should fall to about ¢900 a minute, saving the consumer about ¢500 per minute, added.
Nana Akomea said at the current rate, when the 1GHp tax became operational from January 2008, the cost per minute would go up from ¢1,400 to ¢1,500 and the typical scratch card which cost about ¢75,000 now would cost about ¢81,000.
He said, however, that as a result of the competitive nature of the cell phone business, the operators might not pass on all the taxes to the consumer.
But even if they did, with the expected fall in airtime cost next year from ¢1,400 to about ¢900, the consumer would be paying ¢1,000 a minute, a saving ¢400.
Nana Akomea said “if we focus also on the benefits, it would be realised that on balance, the tax will be beneficial to the nation”, adding that it would go to fund youth employment.
The minister said when properly applied, the tax would provide funding for thousands of young people and noted that it was absolutely crucial that the nation focused on overcoming the current limitations of the macro-economy and the market economy in meeting the demand for jobs.
“One way of overcoming this current limitation is the airtime tax, which will bolster the funding source of the National Youth Employment Programme (NYEP) and allow the programme to employ thousands of young people,” he said.
The minister said joblessness was a canker that not only dehumanised the individual but also the whole society, with dire spill-over effects on crime and security.
He said patrons of reality shows who text onto those programmes paid special rates, while special ring tones could attract rates of about ¢200,000 per annum.
The minister explained that majority of mobile phone users were not the poorest in society, adding that 1GHp a minute contribution to provide jobs for our youth should not be too much sacrifice to make.
He said in another four months, with the expected call cost falling, consumers might not be feeling much pinch and they would be happy at the contribution towards jobs provision.