Ghanaian sues Communication Minister, Ursula Owusu-Ekuful, for ordering telcos to cease upfront CST deductions

The writ argued that by directing the telcos to desist from sending upfront notifications on tax deductions made from purchased airtime, the Minister was interfering with his right to information as a consumer or subscriber and “thus contravenes article 21(1) (f) of the 1992 Constitution and same is illegal and wrongful.”

On October 11, 2019, the Communications Minister ordered the telcos to stop the instant deductions of the 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. This extraordinary upfront deduction of CST and notification of same to the subscribers must stop with immediate effect,” a statement from the Ministry directed.

He argued that the Ghana Revenue Authority (GRA) is the right institution to issue an administrative order on how a tax policy should be implemented “within the meaning of the Revenue Administration Act, 2009(Act 791) hence the directive by the Ministry that the CST should be treated like any other tax and or levy is illegal, unlawful as same is not one of the ‘qualifications’ contemplated under article 21(1)(f) of the 1992 Constitution.”

He therefore prayed the court to issue “a declaration that the tax policy order by the Minister of Communications that the CST should be treated like any other tax and or levy is illegal, unlawful and the usurpation of the powers of the Ghana Revenue Authority within the meaning of the Revenue Administration Act, 2009 (Act 791).”

He also asked the court for an “an interim order directed at the Minister of Communications and the Attorney General restraining them from going ahead with the implementation of the directive in exhibit GT pending the final determination of this application.”

The Communication Service Tax was introduced in 2008 at a rate of 6% payable by consumers of certain electronic communication services. It was increased by 50% when the Minister of Finance, Ken Ofori-Atta in his mid-year budget announced in 2019.

The telcos then started the upfront deductions after which they sent a message to that effect. However, the government has not been happy with this alleging it is a deliberate effort by the telcos to cause disaffection for the government.

Telcos agree to stop upfront CST deductions

Telecommunication companies in Ghana have decided to stop the upfront deductions of the CST.

In a statement issued by the Ghana Chamber of Telecommunications, it stated that the telcos will rather apply the tax through a tariff adjustment programme which will take effect on November 26, 2019.