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Jul 10, 2013

Parliament approves Communications Service Tax amendment bill


Parliament on Tuesday passed the Communications Service Tax (Amendment) Bill, even though industry players have cautioned that the House’s consent to that piece of legislation may lead to the appreciation of the cost of services.

Otherwise known as “Talk tax”, the Communications Service Tax was introduced by government in 2008 to increase revenue by exacting six percent on the value of services accessed by subscribers of mobile telephone networks.

The amendment sought to exact additional levies on interconnectivity, international calls and data transmission, as well as address revenue loss as a result of loopholes in the regulation, but legislators and industry players were sharply divided over the move and called for the truncation of the process because consumers would be hard hit.

However, the House approved the Bill, after extensive deliberations.

The controversial aspect of the amendment that irked the telecommunication organisations about the proposed levy of six cents on calls emanating out of Ghana, was however shelved.

Under the amended act, the ministers of finance and communications are authorised to establish a monitoring mechanism  to verify actual revenue that accrue to the service providers for the purpose of computing taxes due government.

The amendment enjoins communications service providers to give physical access to the physical work nodes where the network providers’ billing systems are connected.

The adjustment also stipulates that any service provider who fails to provide access to its network for government commits an offence and is liable to pay a penalty of five per cent of annual gross revenue of its last audited financial statement after the first 30 days and if the situation persist after 90 days the National Communications Authority may revoke its operating license.

The modification is also emphatic on the non-intrusiveness of monitoring mechanisms on communications traffic, be it video, voice or data, whether local or international.

It also stipulates that service providers who have objections to the introduction of any equipment to a physical node on its network shall within seven days of receiving such request from the ministry prove to a high court the reasons for such objection and how the equipment intrudes upon the discreetness of communications.

The introduction of the Bill earlier in the week in parliament generated heated exchanges with the minority objecting to certain portions of the document, which they said lacked clarity and contravened international agreements.

The bill required an amendment to some provisions in the Communications Service Tax Act, 2008 (Act 754) to clarify the scope and coverage of the tax and include interconnection services within the tax base.

Source: GNA