Telcos to stop upfront ‘talk tax’ deductions next week

Telecommunication companies in the country will from Tuesday, November 26, 2019, stop the upfront deduction of the Communication Service Tax (CST), the Ghana Chamber of Telecommunications has disclosed.

In a statement, the Chamber said it will complete the reconfiguration of its systems to accommodate the commercial and technical requirements for the cessation of the deduction next week to bring respite to consumers.

Currently, customers are charged the 9% CST instantly when they top up airtime.

Following the implementation of the CST,  the Communications Ministry accused the mobile telecommunications companies of milking consumers over their mode of charging.

According to the sector Minister, Ursula Owusu-Ekuful, all efforts to get the telcos to revert to the situation before the increment has failed as telcos “exact their pound of flesh from their consumers.”

“The Ghana Chamber of Telecommunications wishes to notify mobile and fixed subscribers that effective Tuesday 26th November 2019, Telecommunications Operators will cease upfront deductions of 9% CST charge and apply the tax through a tariff adjustment on their products and services. Following our agreement with the government to apply the 9% CST as a price increase instead of as an upfront deduction on recharge.”

“The reconfiguration of our systems to accommodate the commercial and technical requirements is due to be completed by the 26th of November 2019. This will offer customers a smooth transition and a better experience”, the statement said.

Subscribers will be notified of the completion of the exercise and for transparency on the adjusted tariffs of their products and services as well as information on the post usage of these services.

The telecommunications industry remains committed to the socio-economic development of Ghana and that remains our focus and objective,” the statement concluded.

Stopping upfront ‘talk tax’ deductions an act of intimidation – Sam George

A member of Parliament’s Communication Committee, Sam George, had accused the Ministry of Communication of extortion in the directive to telcos to cease the instant deduction of the Communications Service Tax (CST).

Sam George, said: “what she [the Communications Minister] is doing right now is basically intimidation which is extortion on a national scale.”

He also reminded that the CST, which was increased from 6 percent to 9 percent, was a consumer tax and could not be treated as a corporate tax.

“The Minister, who is a member of Parliament, is oblivious of the fact, by this letter she has written, that the CST is a consumer tax and that she, as a minister, does not have the power to vary an act of Parliament because the CST is backed by an act of Parliament. What she is demanding the NCA to do is to convert a consumer tax into a corporate tax. It is not backed by law,” the legislator said.

The Chairman of Parliament’s Finance Committee, Dr. Mark Assibey Yeboah had earlier chided telcos over their mode of implementation of the increment in the CST saying it was a deliberate strategy to make the government unpopular.

“The telcos want to make gov’t unpopular because why didn’t send the text messages 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 anybody tells me they were absolved by the Telcos, then that is absurd.”

Ursula had already been sued over her directive to the telcos to the sue the upfront CST deductions.