Telcos robbing Ghanaians with upfront deductions – Communications Minister

Communications Minister, Ursula Owusu-Ekuful has said that telecommunication operators have been efficiently robbing Ghanaians with the new deductions on purchased data.

Touching on the upfront deduction of Communication Service Tax by telecommunication networks Mrs. Owusu-Ekuful said telcos started deducting a 9 percent upfront on data from October 1, 2019.

Prior to that however, they were already recouping their losses incurred from the recent increment, by taking unused expired data.

It is, therefore, blatant robbery on the part of telcos to exploit customers by using both means.

“We were informed that the network operators took advantage of the 3 percent increment to pass on their entire tax to subscribers. This has effectively increased their profit margins at the expense of subscribers, when there has been no other change in their operational environment.”

Explaining the nature of the deductions she said, “whatever they may have lost in absorbing the 6 percent CST, they more than made up for it by refusing to roll over credit that had been paid for by consumers but remained unused on the expiration of the bundle period.”

She unequivocally added that telcos are “now effectively robbing consumers by passing on the full tax while retaining the unused data and voice bundles.”

The minister further gave a directive to the telcos to discontinue such deductions or be liable to any pending sanctions.

She said the CST must be deducted like all other taxes in the country and not the upfront deductions as already many telco companies have already began.

“As you’re aware, the communications service tax has been in existence since 2018 and has been levied on charges payable by consumers for the use of communication service, it is a usage tax,” she said.

“It must be said that from 2008 to 30th September 2019, Mobile Network operators had been absorbing the 6% CST and as far as the subscriber experience was concerned but they suddenly decided to stop that practice when nothing had changed apart from the 3% increase in the rate of the existing tax.”

Mrs Owusu-Ekuful added other existing taxes like the NHIL, VAT and GETFund are charged based on customer usage.

This was contained in her speech at a Meet-the-Press edition in Accra, October 14, 2019.