Telcos in Ghana to cease upfront communication service tax deduction from November 26

The decision follows a series of consultations with the regulator, the National Communications Authority (NCA) as well as tax authorities.

According to a statement issued by the Ghana Chamber of Telecommunications and was signed by the Chief Executive Officer of the Chamber, Ken Ashigbey, the telecommunications companies will require a number of weeks to reconfigure their systems to stop the upfront deductions.

“The price increase will take effect by November 26th 2019, as the industry requires a number of weeks to complete the reconfiguration of our systems to accommodate the commercial and technical requirement that the exercise necessitates ensuring an even smoother experience for customers,” the statement said.

It added that “However, we understand stakeholders’ concerns and have aligned on the current agreement to implement a price increase to pass on the tax instead of upfront deductions. It is worth noting, that despite this arrangement to stop upfront deductions, GRA will still calculate and account for the CST as an upfront charge.”

The statement further noted that the telcos have resolved to offer some compensation to their customers for their patience during the transition period,

“During the transition period from upfront payments to the pass-through payment of the CST through a tariff increase, our members have resolved to give extra value to reward customers for their loyalty. Subsequently, mobile operators will notify their customers individually in the ensuing days,” the statement added.

Background

The Communications Ministry, recently, issued a directive to Telecommunication networks in the country to compensate their subscribers following the upfront deduction of the Communication Service Tax (CST) within the next 4-6 weeks.

The ministry stated that failure on the part of telcos to adhere to the instruction will result in a sanction per the law.

The Minister of Communications, Ursula Owusu Ekuful said this while she spoke to Accra based Joy FM.

She emphasised that if the companies “flout the regulations per the directives of the regulator, it calls for a suspension or revocation of your license which the law clearly states.”