Mobile telecom operators in the country have denied failing to pay to the Ghana Revenue Authority (GRA) deductions made from customers on the Communication Services Tax (CST), otherwise known as the ‘Talk Tax.’
“There have been several media publications over the past two weeks stating that mobile operators made CST deductions from customers, but have failed to pay them to the GRA as required by law,” the operators said and noted that “this information is incorrect.”
According to a release from the Ghana Chamber of Telecommunications, CST of six per cent was levied on consumers of communications service under the CST law passed in 2008 but the operators do not currently pass on that charge to consumers.
Instead, the Chamber said the telecom operators bore it and paid it to GRA on behalf of consumers.
“The rate consumers are paying now could, therefore, be presumed to include the six per cent CST because the operators have taken it up on their behalf. Assume that an off-net call comes to 10Gp a minute; this is the usage charge or usage fees,” it said.
The Chamber said “For an off-net call, an operator will pay for example, 4Gp of the 10Gp collected from the subscriber and pay it to the other operator to whom the call is made or terminated.”
“Second, the operators pointed out that if the GRA held the position that operators were “consumers” of one another’s services, it would amount to taxing twice the same revenue stream. This is where the argument of the double taxation arose,” the chamber said.
It said operators paid six per cent CST on interconnect revenues from 2008 until April 2011 and then petitioned the GRA, the Office of the President and the Vice-President to review the application of the law and revert it to the position intended by the law.
The Chamber said until April 2011 operators paid CST of six per cent on usage charges and a further six per cent on interconnect revenues derived from those same usage charges.
It said the operators did not pay CST on interconnect revenues after April 2011 when they petitioned, but they continued paying the six per cent on the usage charges.
“Operators did not collect the CST on interconnect revenues from each other after April 2011 during the petition,” it added.
Against that background, the Chamber said “individual operators declined to pay CST on interconnect revenues to GRA because their contention was that the tax had already been paid by the subscriber/consumer on the usage fees and handed over to the GRA.”
Court action
The Chamber said when operators and GRA could not agree on a common interpretation of the law, they went to court for a judicial declaration that providing inter-connect services did not make them consumers, and the court agreed with them.
“The court, therefore, held that all the CST on inter-connect revenues paid by and collected from operators by GRA between 2008 through March 2011 were illegal,” the Chamber said.
“The information put out to the public that operators collected taxes from subscribers or from one another since April 2011 but did not pay them to GRA is, therefore, incorrect,” it said.