Business News Mon, 14 Oct 2019
Government has encouraged telecommunications subscribers to report Mobile Network Operators (MNOs) who provide poor services, for remedial action.Minister of Communications, Ursula Owusu-Ekuful, made the call in an address to journalists on Monday, October 14, 2019, at the Information Ministry in Accra.
She was briefing the media on happenings within the telecommunications industry locally and globally.
According to the Minister, Government “…will also countenance no excuses for poor service quality and encourage all customers to report any issues of poor quality of service or substandard user experience to the regulator for remedial action.”
Touching on the Communications Service Tax (CST) issue, she noted that the Ministry will work with operators to resolve any issues they may have but will expect the same cooperation from them in complying with their licence conditions.
During the mid-year budget review in parliament on Monday, 29 July 2019, the Finance Minister announced the increase of Communication Service Tax (CST) from 6 percent to 9 percent effective September 4, 2019 to provide revenue for cyber security initiatives to protect the digital infrastructure being used by both the public and private sector.
The Minister reiterated that the CST has been in existence since 2008 and has been levied on charges payable by consumers for the use of communication services.
It must be said that from 2008 to 30th September 2019, Mobile Network Operators (MNOs) have been absorbing the 6 percent CST, and as far as the subscriber experience was concerned, and they suddenly decided to stop that practice when nothing had changed apart from the 3 percent increase in the rate of the existing tax, she noted.
Getfund, NHIL and VAT levies were all deducted based on usage and not an upfront deduction upon recharge, according to her.
“The Ministry met MNOs and the Regulator on 7th and 8th October 2019 on this unusual practice which flew in the face of industry experience and we were informed by MNOs that they took advantage of the 3% increase to pass on the entire tax to subscribers,” she said.
According to her, “this has effectively increased their profit margins at the expense of subscribers, when there has been no other change in their operational environment.”
She added that “whatever they may have lost in absorbing the 6% CST, they more than made up for it by refusing to roll over credit that had been paid for by customers but remained unused on the expiration of the bundle period. They are now effectively robbing consumers by passing on the full tax while retaining the unused data and voice bundles.”
The Ministry upon receipt of numerous complaints from consumers, she said, has given policy directives for all Mobile Network Operators, Broadband Wireless Providers and Internet Service Providers to the Regulator, NCA, to ensure the immediate implementation of the CST should be treated the same way VAT, GETFUND, NHI levy and all other taxes imposed on entities doing business in Ghana are treated.
She reiterated that the extraordinary upfront deduction of CST and notification of same to subscribers must stop with immediate effect.
“All unused voice and data bundles purchased by subscribers should not expire and must be rolled over with the next recharge,” she noted, adding that MNOs will be subjected to strict compliance with existing Quality of Service (QoS) standards to ensure value for the subscribers’ money in accordance with their license obligations.
This is what all operators are now required to do with the directive, Mrs. Owusu-Ekuful said.