Business News of Thursday, 19 July 2012

Source: myjoyonline

Government considering review of Talk Tax

Minister of Communication, Haruna Iddrisu has assured telecom operators that government is taking a second look at the communications service tax (CST), otherwise known as talk tax for a possible review.

The minister gave the assurance at a press conference to mark one year of successful operation of Mobile Number Portability (MNP) in Ghana.

Telecom operators have complained about what they call double taxation in the CST, explaining that after 6% direct tax on phone calls, the government charges an additional 6% on the interconnect fee that the call originator network pays to the network on which that same call terminated.

So if a customer of MTN, for instance, makes a call to a customer of Tigo, there is a 6% tax on every minute of that call, which MTN pays to government; and then the amount that MTN pays to Tigo for being the network on which the call terminated, is also taxed another 6%.

The telcos call for a review of the dual taxation gained international weight at the GMSA Workshop in Ghana, when Director of Spectrum Policy for Middle East and Africa, Peter Lyons repeated the call for the review.

Adom News gathered from a reliable source that the telcos prepared a their case document on the matter and were on the verge of filing a law suit against government, but for the time intervention of a renown statesman (name withheld).

Haruna Iddrisu however said government has appointed some tax policy experts to study the concerns of the telcos and upon the advice of the experts, government would consider a review of the CST.

“Let me assure that operators that your concerns of double taxation is receiving government’s adequate attention and as and when the policy experts advise government a review of the legislation will be considered,” he said.

He said it is now within the powers of the tax experts to look into the pros and cons of the argument whether government is engaged in the double taxation or not, in the matter of the CST.

The Minister also assured the telcos that government is willing and ready to give special tax incentives to operators who would extend voice and data services to the un-served and under-served rural communities in line with government’s quest to provide mobile telephony and broadband access to all Ghanaians.

He said government has appointed the ISSER of the University of Ghana with funds from the Universal Access Fund to undertake the first Digital Divide Study in Ghana to determine the level of deficit in the country’s digital divide between developed urban and under privileged rural Ghana.

“On matters of gender the study will find out whether it is less females who use phones and mobile broadband or less males,” he said.

The Minister also said he is happy to note that government has been vindicated in the court of public opinion with regards to SIM registration, which many people kicked against until it was done.

He said, if not for nothing at all, the police records show that SIM registration has helped to reduce crime, particularly cell phone based crimes and other illegal activities.

“The days when people sent treacherous text messages to people anonymously are over and criminals are now aware that they cannot take advantage of mobile phone to threaten or defraud people anymore because we are tracking their activities,” he said.

Touching on MNP, the minister said MNP has served as social engineering tool to drive better quality of service, improved customer care, introduction of varied and relevant products and services and also driven reduction in telecom tariffs, all in the effort by telecom operators to keep their customers and win more.

He said the customer now has a choice and he is now king, which also vindicates the move to introduce MNP.

The Minister also lauded the regulator, National Communication Authority and the telecom operators for making MNP work.