Telecommunications Companies operating in the country were recently directed by the Communications Minister, Ursula Owusu-Ekuful, to stop milking consumers by pushing the nine per cent communications service tax (CST) on them.
The telcos were previously absorbing the six per cent CST but when government announced its increment to nine per cent in the 2019 mid-year budget, and implemented it, these companies have now shifted the burden on consumers. A letter written to the National Communication Authority (NCA) by Mrs Owusu-Ekuful said dated October 9, 2019, follows an accusation by the Chairman of the Finance Committee of Parliament of how the telcos implemented the CST to cast government in bad light.
Again, efforts to make the telcos absorb the tax fell on deaf ears.
“To minimize the negative impact of the current mode of deduction of the CST, the Ministry of Communications hereby directs the immediate implementation of the following measure: CST should be treated the same way VAT, NHIL, GETFUND levy and all other taxes and levies imposed on entities doing business in Ghana are treated… These extraordinary upfront deductions of CST and notification of same to the subscribers must stop with immediate effect,” the Ministry of Communications directed.
The Minister also directed that “all unused data and voice bundles purchased by subscribers do not expire and must be rolled over with the next recharge. MNOs will be subjected to strict compliance with existing Quality of Service (QoS) standard to ensure value for the subscribers’ money in accordance with their licence obligations.”
Dr. Mark Assibey Yeboah, Chairman of Parliament’s Finance Committee, who earlier blamed the telecommunication companies over their mode of implementation of the nine per cent increment in CST, said that was a deliberate strategy by the telcos to present government as uncaring.
The telcos introduction of an instant deduction of the tax saw a customer who bought a recharge of GH¢10 worth of talk time for example, losing 80 pesewas instantly and left with GH¢9.20.
However, the Ranking MP’s Finance Committee, Cassiel Ato Forson, has “strongly disagreed” with the government’s position saying there was nothing wrong with the stance adopted by the telcos.
Speaking to Citi FM, Ato Forson said telcos had to adopt the new style of notifying customers immediately of deductions on their recharges in order to avoid being accused of cheating.
“First of all, let me say that I strongly disagree with my colleague the Chairman of the Finance Committee, in the sense that an increment of 50% is quite substantial and again it is important to know that telcos have been charging this tax and it has been reflecting on our bills from day one.”