Telecoms Chamber punches big holes in shambolic Subah Report

The Telecoms Chamber has punched big holes in the famous “Subah Report”, expressing its utter disappointment in the manner in which the committee overlooked the main issues for which it was set up to investigate the Ghana Revenue Authority (GRA)-Subah Infosolutions Contract.

The committee was set up by the Ministry of Finance and it had membership from the Ministry Justice and Attorney-General, Ministry of Communications, National Communication Authority (NCA), GRA and other government institutions.

The committee, during its work, invited people from Subah to tell their side of the story, but never invited any telco, even though Subah and GRA accused the telcos, without evidence, of refusing to cooperate with Subah between 2010 and 2012.

The report has since come under heavy public criticism, and not a single analyst has said anything positive about it.

In a letter to the Minister of Finance, therefore, the Telecoms Chamber pointed out the obvious oversights and resulting glaring flaws in the Committee’s Report.

The letter was copied to the Executive Secretary to the President, The Chief of Staff, Flagstaff House, The Minister of Communications, The Minister of Justice & Attorney General, The Commissioner-General, GRA and the Director-General, NCA

Adombusiness intercepted a copy of the letter and we hereby published an unedited copy of it.

Ref: GCT/MoF /14/246
May 15, 2014
The Honorable Minister,
Ministry of Finance
ATTN: Hon. Seth Terpker

Dear Sir,

We have received a copy of the above report, details of which have been widely circulated to the media. Mobile Network Operators (Teleos) have had reservations about public statements issued in September 2013 by the Ghana Revenue Authority (GRA) about the failure of Telcos to comply with their legal obligations. This was in the aftermath of media reports that Subah Infosolutions had been paid GhC74 million from 2010-2012 for services allegedly not rendered to GRA.We did not react because it was our expectation that the Committee set up by the Ministry of Finance would enable Teleos to clarify or correct certain facts that had been overlooked or misrepresented.

By this letter, we wish to bring to your kind attention the following observations and comments for review and subsequent action.

1. The 14-member Committee did not invite or speak to any Telco in its

investigations. However, it had three representatives from Subah Infosolutions.

2. The Report, under “SCOPEOFSERVICE”(Section 4, paragraph 2) reads: “In the wake of the signing of the service agreement, Subah requested to physically connect its equipment to the physical nodes of the Teleos, but the request for physical access was denied by the Teleos, citing the risk of Subah listening in to the conversation and messages of their customers. Subah could not therefore have access to the physical network nodes of the Teleos.”

a) According to Paragraph 1(BACKGROUND)of the Committee’s Report, the Revenue Agencies Governing Board (RAGB) signed the contract with Subah Infosolutions on May 5, 2010. However, the law requiring Telcos to allow electronic monitoring, i.e. (CST (Amendment) Act, 2013 (Act 864), was passed in July 2013.

b) GRAdid not introduce Subah to any telco until after Act 864 was passed. A copy of the introductory correspondence written by GRAto the Ghana Chamber of  Telecommunications on October 28, 2013, and to all Telcos is attached for your information. Telcos could therefore not have denied Subah access to their respective nodes prior to their introduction since they were not even aware of Subahs existence or the service it had been contracted to provide. Enquiries made with all the Telcos have also confirmed that none of them received a letter from Subah itself requesting for this interconnection. Subah’s first letter to Telcos asking for a meeting was dated [October 28, 2013J following the introduction letter from the GRAreferenced above.

3. The Report also reads (Section 4, paragraph 3) that: “….Subah have been carrying out only the monitoring relating to verification of the application of the correct CST rate to the volume oftraffic declared by the Telcos (i.e. whether the various calls are taxed at the appropriate rate). This is done by SUBAHobtaining the CDRs on the volume of traffic supplied by the Telcos to NCAcontaining the details of the traffic volumes they declare.

Comment: The Call Data Records (CDRs) which Telcos submit to NCA are for International In-bound Traffic on which there is no CST charged as the calls originate from outside Ghana. Therefore Subah Infosolutions could not possibly have verified CST by analyzing CDRsheld by NCA. Telcos do not send CDRs to GRA,for which domestic traffic on CSTis levied. Telcos are audited on site by GRAitself.

4. Paragraph 8 of the Executive Summary reads: “The Committee believes that the increase in access lines cannot be contributed (sic) to the efforts of SUBAH. The value of access lines amounted to 21% increase in revenue between June 2010 and October 2013. The threshold was therefore increased by 21%. In other words, 21% of the incremental revenue is being deducted before the remainder is apportioned between SUBAHand Government.

Comment: If Subah Infosolutions did not contribute to the increase in access lines between June 2010 and October 2013, as admitted by the Committee, and it did not electronically audit Telcos or analyze CDRsfor the reasons explained above, we fail to fathom the basis for apportioning revenue between the Government and Subah.

In spite of these reservations, Telcos have co-operated with GRAand its agents, Subah Infosolutions, since November 2013 to ensure compliance with the law. Each Telco is currently at an advanced stage of completion, following technical and legal due diligence.

We hope that this information helps to provide the fundamental information for further decision-making.

On behalf of our members, please accept/Sir, the assurances of my highest esteem.

Kwaku Sakyi-Addo
Chief Executive Officer.
Cc: The Executive Secretary to the President
The Chief of Staff, Flagstaff House
The Minister of Communications
The Minister of Justice & Attorney General
The Commissioner-General, GRA
The Director-General, NCA

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