Telcos right in upfront 9% CST charge – Imani Africa

Vice president for Imani Africa, Kofi Bentil, has said that Mobile Network Operators (MNOs) are right in charging the 9% Communication Service Tax (CST) upfront, and are not flouting the law in doing so.

Mr Bentil said, during an interview on Joy FM’s Super Morning Show on Monday, that the tax is a consumption tax, hence the telcos have the right to either absorb it or pass it on to its customers.

The CST, which has been increased from 6% to 9%, has been applied by the telcos to any recharge purchase bysubscribers.

“The telcos have done no wrong. It is a prerogative of the telcos to choose if they want to absorb a tax or not. Especially where the government chooses that the tax be a consumption tax like VAT. That by definition means the tax should be paid directly by the consumer,” he told sit-in host, Daniel Dadzie.

“The upfront deductions are not in conflict with the law. It is what the law requires them to do. The only difference is that we are being informed by the telcos of the actual amount which is being deducted upfront,” he said.

“I really do not see a difference in me being charged the tax upfront and when I use it as and when I consume. If the computation is right, the upfront deduction and the charge from when the consumer is taking it up becomes the same. So really I don’t see how the lack of upfront deduction ameliorates the situation consumers find themselves,” he added.

The Communications Ministry has said MNOs defying the October 11 directive on the CST will be sanctioned.

Source: JoyBusiness