The Curious Case of How Ghana Spent $32M to Reduce Tax Revenue by $4M.

Should the Ghanaian regulatory authorities continue to insert probes and gateways into and within the telecom network to monitor sales of the country’s mobile network operators directly because they do not trust them to disclose the right numbers and therefore pay the right amount of tax?
Further thinking is obviously required. But at least we need to start from data-based rational analysis.
Here is the starting point of any serious analysis regarding the “official paranoia” based “count traffic and tax” policy being used in the country’s telco industry:
Of all the taxes imposed on the Ghanaian telecom sector, the only one that is transaction based in a way that makes the principle of measuring traffic to determine revenue remotely valid is the communications service tax (CST), a top-line tax. The other top-line, and of course bottomline, taxes are not really transaction based. One needs to look at a suitable range of accounting metrics to determine the right revenue and then apply the tax.
The communication services tax is barely 25% of the taxes paid by just MTN, the biggest but still only one of five active network operators, though. It is about 15% of all taxes the telecom sector as a whole pays.
Since the country imposed PPP contractors, Subah and Afriwave, on the telco industry to police them at a cost, per the government’s own analysis, of $32 million a year, revenue from CST has actually FALLEN. From $58 million in 2016 to $54 million in 2017.
Tax take from the overall sector has also dropped. At any rate, probes and sensors cannot help ensure honesty in corporate tax matters, or national stabilisation levy matters, so that point was moot.
Does the reader actually understand the point being made? Let me repeat: Ghana has spent $32 million a year on private contractors in order to REDUCE CST (tax) revenue from $58 million to $54 million!
And yet this is the segment of telecom tax revenue that is MOST SENSITIVE to the technologies being deployed to prevent the telcos from cheating and lying. What about the 80% plus take from other taxes in the sector? That much larger proportion of tax revenue that probes and sensors in the live network cannot really reach?
Is this really serious policymaking?
I will be the first to admit that I haven’t conducted a study to gauge the honesty or dishonesty levels of the telecom industry, and I am not one to make rash assumptions. But neither has the government! No one has.
How can a country be run on base gut instincts? On groundless suspicions? Just so that officialdom can then decide to spend over $32 million a year chasing their tail (the government will say that their latest policy will reduce this amount to $17 million, but that isn’t accurate as the industry is still saddled with interconnect gateways that add no value and need to be paid for)?
Surely, Ghana can start with some serious studies and broad-based consultations across the industry and the research community for superior ideas about how to grow the telecom industry, leverage it and then extract even more revenue?
What am I missing?

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