Story Caroline Boateng & Rebecca Quaicoe Duho
Communications service providers have given mixed responses to the Communications Service Tax (CST) introduced last Sunday.
Separate interviews with some of the providers, who are to collect the tax, indicated that while some were comfortable with the tax regime and had been sensitised to it, others complained that they had not received enough sensitisation to the tax.
A source at the Busy Internet, who did not want to be named, said they had not been given adequate training on how the CST was going to be operated.
According to the source, although they are expected to start charging for the CST this month, they had attended just one seminar organised by the VAT Service, a programme that it described as not being “exhaustive enough”.
The source said they had not been given in-depth training on the CST to equip them on how to compute the tax, adding that the forms for the CST were more complex when compared to the VAT and National Health Insurance Scheme (NHIS), since the latter came with a supplementary document, which the service provider was also required to fill.
The source further expressed the concern that contrary to the perception that the CST was not going to overburden the end user, it was going to create an unnecessary inflation in the country and therefore called for adequate training on it.
For instance, with the coming into force of the CST, technically, charges for VAT and NHIS was going to go up by six per cent, since they were expected to compute the VAT and NHIS after they had added the CST to their gross sales.
The source who identified three problems that they were going to encounter with the CST, mentioned the first as being that at the end of every month, they as service providers were going to be required to show their wholesale revenue for the month, a situation that the source said was going to bring an additional responsibility of which they had not had any training on.
The second problem is that since they provided a pre-paid service they were currently in a fix as to how to get their clients to pay for the June service, since most of them had already been sent invoices of which they had paid for and therefore called for some consideration from the government.
The third is that the CST was going to make their already seemingly expensive service more expensive, saying that it was going to cause an inflationary spiral, which would make their product unattractive to people.
The source said currently they were in the process of revising their charges to include the CST and wondered how their clients were going to take the changes in the July invoices, which would reflect the CST.
The Head of Marketing of the Ghana Telecom (Onetouch), Mr Steven Kofi Badu, said Onetouch had started charging for the CST.
He, however, said as a mitigation measure, his outfit had taken measures to absorb some of the cost of the service by ensuring that calls made from Onetouch to Onetouch or any Ghana Telecom (GT) line was going to be borne by the service while calls from Onetouch to other network services were going to be paid for by the user.
Mr Badu said with effect from June 1, as required by the CST Act, Onetouch had revised its charges with an increase of six per cent to enable them to honour their tax obligations.
He explained that his outfit did not have any problem with the tax as it only had to take six per cent from its gross sales and pay it into the government chest, adding that they were ready to work with it.
The Managing Director of Kasapa, Mr Robert Palitz, said they were still studying it.
He said although Kasapa would comply with the directive, they were yet to revise their charges to include the tax.
He, however, gave the assurance that when they finally got on board, "we will continue to be the cheapest paying cellular network".
Efforts at getting the Communications Director of MTN, Ms Mawuena Dumor, proved futile.
The Value Added Tax (VAT) Service, when contacted, however, stated that guidelines on the collection of the tax had been prepared and distributed to all the service providers while notices had been sent out to all of them.
In addition, the Service has organised several workshops and fora on the implementation from June 1, 2008.
The Head, Public Affairs and Information Unit, of the Service, Ms Florence Asante, told the Daily Graphic in Accra yesterday that contrary to some media reports that some communications service providers were unaware of the commencement of the tax regime, the service had notified all of them.
Ms Asante said the sensitisation programmes were not over, adding that more programmes would be organised to help all stakeholders better grasp the law and their obligations under the Act.
She advised the public to be vigilant and monitor the success of the implementation of the tax as it was intended for a good purpose.
Twenty per cent of the tax will be used to fund the National Employment Programme (NYEP) under the CST Act 754, and with that stipulation under the Act, Parliament would also monitor the collection and intended use of the funds accruing from the tax, she pointed out.
She added that there was, therefore, no need for anyone to be apprehensive that the tax would be misused.
Under the CST Act 754, national fixed networks and mobile cellular network operators, Internet Service Providers (ISP), public or corporate data operators, providers of radio FM broadcasting services and providers of free-on-air and pay-per-view television services are businesses included in the tax regime.
A licence, that is, Class one, to be granted by the National Communications Authority (NCA), is required by all such businesses to charge the CST levy on consumers under the Act.
Ms Asante further explained that the same process for charging VAT was used in the CST tax.
Thus, service providers had one month to account for the tax of the previous month.
With the commencement of the tax on June 1, 2008, it is expected that all those licensed to collect the tax will make returns from July 1 to 31.
However, unlike penalties under the VAT law, default in making returns and payments under the CST attracts stiffer punishments.
Ms Asante explained that GH¢2000 spot penalty would be paid if a licensed business did not make any returns after the last prescribed day of making returns on the tax.
Moreover, an interest of 150 per cent of the prevailing commercial bank rate would be charged on the tax collected.
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