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Telecom

Ghana government bans expiring voice and data bundles

ghana wants to ban expiring voice and data bundles

The Government of Ghana has directed Telecommunication operators in the country to stop the expiry of voice and data bundles purchased by consumers. Given that AirtelTigo is the only network operator in the country which offers data bundles that does not expire, the directive could be an instruction to MTN and Vodafone Ghana to also stop expiring data and voice bundles.

In a letter dated October 9th 2019, the Ministry of Communications asks telcos that all unused data and voice bundles purchased by subscribers must not expire but rather be rolled over with the next recharge. The letter was signed by Ursula Owusu-Ekuful, the minister in charge of the sector.

The minister also instructed all telcos in Ghana to stop the instant deduction of the Communications Service Tax (CST). The tax applies on charges for the use of electronic communications service. Consequently, companies engaged in the provision of electronic communications service, as defined by the Communications Service Tax Act, 2008 (Act 754), will now be required to charge CST at 9%.

The tax base for charging CST is the service value excluding Value Added Tax, the Ghana Education Trust Fund Levy, and the National Health Insurance Levy.

Below is the letter:

We must emphasise the fact that CST was increased from the existing rate of 6% to 9% effective 4th September, 2019. The tax has been in existence since 2008 and was increased to provide revenue for cyber security initiatives to protect the digital infrastructure and policies being used by both the public and private sector.

At the series of meetings held between the Ministry of Communications, Mobile Network Operators (MNOs) and the NCA on 7th and 8th October, 2019, we were informed that prior to 4th September 2019, MNOs had not been passing on the CST to subscribers but had decided to take advantage of the 3% increase to pass on the entire tax to subscribers. This has effectively increased their profit margin at the expense of subscribers.

All efforts to get them to revert to the September 2019 situation has failed as they literally exact their pound of flesh from their consumers.

To minimize the negative impact of the current mode of deduction of the CST, the Ministry o Communications hereby directs the immediate implementation of the following measure:

  1. CST should be treated the same way VAT, NHIL, GETFUND levy and all other taxes and levies imposed on entities doing business in Ghana are treated. This extraordinary upfront deduction of CST and notification of same to subscribers must stop with immediate effect.
  2. All unused data and voice bundles purchased by subscribers do not expire and must be rolled over with the next recharge.
  3. MNOs will be subjected to strict compliance with exiting Quality of Service (QoS) standards to ensure value for the subscribers’ money in accordance with their licence obligations.

Kindly ensure that these measures take immediate effect.

I am counting on your usual prompt cooperation in this regard.

Yours sincerely,

MRS. URSULA OWUSU-EKUFUL

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