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Telcos must support govt in implementation of new CST

GOVERNMENT on Friday October 9, 2019 directed Mobile Network Operators (MNOs) to stop passing on the Communication Service Tax (CST) to consumers.  The concern of the government, as expected, is the hardship that the 50 per cent increment in the CST – from six per cent to nine per cent – had brought upon consumers.

Arguing that the CST be treated the same was as VAT, NHIL, GETFund levy and all other taxes and levies imposed on entities doing business in Ghana; government added that passing the CST to consumers has “effectively increased [the] profit margin

at the expense of subscribers.”  

The government further directed the MNOs to ensure that all unused data and voice bundles purchased by subscribers should not expire and must be rolled over with the next recharge.

These arguments put forward by the government are to obviously ensure that the subscriber is not overburdened in the prevailing economic conditions.  

The Ghanaian Times fully agrees with the government that under no condition should a person’s data bundle expire. Voice data in the past used to expire but with changing times, that phenomenon has changed. Same must be applied in the utilisation of data bundles.  

One can only imagine how irritating it would be for example to wake up in the middle of the night to send a mail, place a call or attempt to send a whatsapp message only to be told that the data or voice bundle had expired.

Mobile credits are not perishable so the MNOs must not make it look like if it is not used within a certain time frame, it would go waste. Making mobile voice and data bundles perishable must not be entertained anymore.

It is important and outright critical that the subscriber is allowed to use his or her bundle at his or her own pace and not rushed to do so.

 On the directive that the networks stop the deduction because same has never been done, in as much as it would go a long way to cushion the subscribers, we think that the government may not be successful in its advocacy to protect the subscriber from the extra charges that has been imposed in the wake of new CST regime.

This is because of consumption taxes imposed on the purchase of goods and or services. The CST Act, 754 in section one said it would be “levied on charges payable by consumers for the use of communication services” making it a consumption tax.    

With this legal backing, ordering the MNOs to treat the CST as NHIL, VAT or GETFund may not yield the desired result. What we propose is for government to use the 2020 budget, scheduled to be read in November, to make the CST a corporate tax.

By this, the MNOs would be taxed based on their profit margins instead burdening the subscriber.

The telecommunication industry, without doubt, has become an integral part of the ‘everyday Ghanaian’ with more than 40 million mobile subscriptions in Ghana. It holds a huge economic potential for the country and steps must be taken to position it where the state can derive the full benefit.    

It is our hope that the government would succeed in its efforts to make life comfortable for mobile phone users in the country.  

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