The Minister of Communications, Mrs Ursula Owusu Ekuful has responded to the letter of the Member of Parliament for Ajumako Enyan Essiam, Mr Cassiel Ato Forson that indicated that the Minister had no power to direct telcos to hide talk tax from consumers.
In a letter dated October 16, 2019, written and signed by Mrs Owusu Ekuful as a reply to Mr Ato Forson’s letter, the Minister indicated that while she was respecting Mr Forson’s right to interpret the law, “the way you choose, I am not bound to accept either your reading, understanding or interpretation of the law.”
“I hold a contrary opinion fortified in the fact that the Electronic Communications Act which provides the legal basis for all Mobile Network Operators work in this country also gives the Minister of Communications the right to issue policy directives to the regulator in the management of the Sector.”
“It is that power which I [Ursula] exercised in issuing policy directives to regulate the manner in which customers are treated by the telecom companies. We insist on them being treated respectfully and in a non-discriminatory manner which also provides value for their money. I’m sure you will not disagree with me on this.
“However if you [Ato Forson] feel strongly that customers do not deserve this kind of treatment you know what to do and are entitled to your opinion. Your remedy does not lie in issuing orders and instructions to me on how to do my work. As the adage goes, if I want lessons in good morals, I certainly will not go to a brothel for it.”
“I respectfully decline your invitation as you are not the proper authority to declare what is or is not legal in this country,” Mrs Owusu Ekuful’s letter stated.
In his letter to the Minister, the Minority spokesperson on Finance, Mr Cassiel Ato Forson informed the Minister that she has no power to direct the telecommunications companies to put an end to the upfront deductions of the nine per cent talk tax at the point of recharge.
The Minister had directed the telecommunications companies as far as deductions of the Communication Service Tax (CST) popularly known as talk tax, was concerned, to treat it same way as the Value Added Tax (VAT), National Health Insurance Levy (NHIL), Ghana Education Trust Fund (GETFund) Levy and all other taxes and levies imposed on entities doing business in Ghana are treated.
According to the Minister, the extraordinary upfront deductions of CST and notification of same to subscribers must stop with immediate effect.
The directive was given when the Ministry of Communications met with the regulator, National Communications Authority (NCA) and the Mobile Network Operations (MNOs), Broadband Wireless Providers and Internet Service Providers on October 7th and 8th 2019.
In essence, the Minister wanted the telecommunications companies to only charge or deduct the CST based on usage and not upfront as they have resorted to doing in recent times.
Her directive was premised on numerous complaints from consumers over upfront deductions of talk tax at point of recharge when same has not even been used.
However, in Mr Ato Forson’s letter dated Monday, October 14, 2019, and addressed to the Minister, he pointed out that her directive to the telecommunications companies was illegal and therefore called for the immediate withdrawal of same.
According to him, it was only the Ghana Revenue Authority (GRA) that had such powers to issue directives to the telcos as far as deductions of the Communications Service Tax (CST) are concerned.
“I would like to point out that: (1) Under the Revenue Administration Act 2009 (Act 791), the administration and management of tax revenues reside in the Ghana Revenue Authority, and (ii) the CST Act 2019 does not apply the principles of the Value Added Tax (VAT) Act 2013 (Act 870).”
“From the two Acts, The Minister for Communications does not have the powers to issue an administrative order on how a tax policy should be implemented; and secondly, the CST cannot be treated in the same way VAT is treated”, the letter in part stated.
It added “The issuance of the directive is, therefore, an illegal act and should be withdrawn with immediate effect. It is unconscionable for the Government to increase the CST but insist that telecommunications companies hide the deductions from the consumers. If the government thinks the policy is making it unpopular, it should come to parliament to repeal the Act”.