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

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

Speaking to Citi News, 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 added.

Following the increment of the CST from 6% to 9% the telcos introduced an instant deduction of the tax.

For instance, a recharge of GHc 10 worth of talk time gives consumers GHc9.2 as a result of the tax.

The Communications Ministry in its directive ordered for the cessation of the upfront deductions and also said the CST should be treated the same way as VAT, NHIL and other levies are treated.

The Ministry also directed that all unused data and voice bundles purchased by subscribers should roll over with the next recharge.

Concerns over mode of collection

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.”

But the Ranking Member on Parliament’s Finance Committee, Cassiel Ato Forson, “strongly disagreed” with claims of sabotage by the Telcos in the implementation of the 9% increment in the CST.