The committee tasked to review and renegotiate the service agreement between SUBAH Info Solutions and the Government of Ghana has declared the agreement as valid.
According to the committee report – a copy of which is available to DAILY GUIDE – the agreement cannot be terminated, considering the legitimacy of the board chairman who approved the terms of service.
It has therefore proposed a 1% reduction in the fees charged by the service provider from 13.5% to 12.5% on grounds that Subah Info Solutions had not incurred any cost at the implementation stage of the contract.
Thus, the reduction in the rates paid would imply that government would earn GH¢1.48 million at the expense of the company, which was contracted in 2010 to ensure effective collection of Communication Service Tax (CST).
The 14-member committee comprising representatives of the Finance Ministry, Ghana Revenue Authority (GRA), National Communications Authority (NCA), the Attorney-General’s Department and Subah, stated that although the company had contributed in monitoring the revenue that accrued to telcos, ‘the growth in revenue from telcos was not only due to Subah’s monitoring, but also other factors such as growth in access lines which were not considered in setting the current threshold.’
The value of access lines was said to have accounted for a 21% increase in revenue between June 2010 and October 2013; therefore it was important to make that deduction from the incremental revenue before the remainder shared between Subah and government.
Meanwhile, Subah is said to be testing data flow and tax circulation validation with four out of six mobile network operators after physical installation of monitoring equipment.
The company has also signed a non-disclosure agreement with five telecommunications companies to guarantee data confidentiality.
Subah Info Solutions was contracted to provide a revenue assurance monitoring system to address the revenue shortfalls occasioned by ineffectiveness in the revenue collection process with respect to Communication Service Tax.
The five-year contract which was approved by the Public Procurement Authority, subject to renewal, commenced in June 2010.
Per the agreement, Subah is paid 13.5% of the incremental revenue over and above the average monthly collection of VAT and CST received from telecom companies.
The company had been paid a total GH¢74,356,240 until August 2012 when the payments were suspended.
It is not clear if with the green light given to the company, the arrears would be paid.
BY Ernest Nutsugah
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