Stop upfront ‘talk tax’ deductions – Communications Ministry orders Telcos

The telecommunication companies in Ghana have been ordered to cease the instant deduction of the Communications Service Tax also known as Talk Tax.

“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 directive was captured in a letter the Ministry wrote to the National Communications Authority (NCA) and sighted by citinewsroom.com.

The Ministry 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 exiting Quality of Service (QoS) standard to ensure value for the subscribers’ money in accordance with their licence obligations.”

Upfront ‘talk tax’ deductions making gov’t unpopular– Assibey Yeboah

The Chairman of Parliament’s Finance Committee, Dr. Mark Assibey Yeboah had earlier chided the telecommunication companies over their mode of implementation of the 9% increment in the Communication Service Tax.

According to him, the operation of the Telcos is a deliberate strategy to make the government unpopular.

Following the increment of the CST from 6% to 9% the telcos introduced an instant deduction of the tax.

For instance, a recharge of GHc 10 worth of talk time gives consumers GHc9.2 as a result of the tax.

Speaking to Citi News after an Article IV consultation with the International Monetary Fund (IMF) on Wednesday, Dr. Assibey Yeboah questioned the motive of the Telcos for implementing the tax in such a manner.

“The telcos want to make gov’t unpopular because why didn’t send the text mages of the deduction when the tax was 6 percent. They were paying the government and we knew how much we were collecting from them so if any body tells me they were absolved by the Telcos, then that is absurd”, he fumed.

Ato Forson disagrees

But the Ranking Member on Parliament’s Finance Committee, Cassiel Ato Forson, “strongly disagreed” with claims of sabotage by the Telcos in the implementation of the 9% increment in the CST.

Speaking on Eyewitness News earlier in the week, Ato Forson explained that the Telcos had to adopt the new style of notifying customers immediately of deductions on their recharges in order to avoid the accusation of cheating that has always being leveled against them by consumers.

“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. The difficulty is that often times Ghanaians blame the Telcos of that they buy credit and they have cheated them in the usage of the credit and so for that matter, it is important for them to show to all of us how much of this component goes into the credit itself and how much goes into taxes.”

Source: citinewsroom.com

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