Communications Ministry Sued!

An indication by the Ministry of Communications ordering telecommunication companies to stop the upfront deductions of the Call Service Tax (CST) from subscribers is being challenged at the Accra High Court.

The Minister was sued together with the Attorney General and the Mobile Telecommunications Networks by a private citizen called Dzifa Gunu.

“Under the Revenue Administration Act, 2009 (Act 791), the administration and management of tax revenues reside in the Ghana Revenue Authority and not the 2nd Respondent (Ministry of Communications) and further the CST Act 2019 does not apply the principles of the Value Added Tax (VAT) Act, 2013 (Act 2013).

The applicant also contends that since the second respondent was not the proper person in terms of Act 791 to issue an administrative order on how a tax policy should be implemented, the said directive that the CST should be treated like all other levies and taxes are treated in Ghana is illegal and unlawful,” Dzifa Gunu argued in his writ that the proper institution to issue an administrative order on how a tax policy should be implemented is the Ghana Revenue Authority.

He, therefore, prayed the court to immediately order the Minister of Communications to reverse the directive that service providers should stop notifying subscribers of the deductions made from airtime as Communications Service Tax.

The CST, introduced in 2008, was fixed at 6 per cent for consumers of some electronic communication services.

However, the Minister of Finance, Ken Ofori-Atta, in his 2019 mid-year budget, announced a 50 per cent increment in the CST.

Telcos were unhappy with this development hence they resorted to deduct CST upfront on all recharges made by their consumers from October 1, this year, with SMS notifications to them.