Minister Questions Telcos Tariff Increase

Deputy Minister of Communication, George Andah, finds reasons by the Ghana Chamber of Telecommunication for an impending increment in tariffs by telcos problematic.

The minister asked the telcos to show the basis for the increase in relation to tax regime, saying “Telcos are not regulated as far as their pricing is concerned. However, if the Telecom Chamber is saying that as a result of a change in the tax regime, they have had to increase their price then I have an interest to understand how the change in tax regime is influencing their prices.”.

Mr. Andah was speaking on Citi FM’s News Analysis Programme, The Big Issue over the weekend.

The Chamber had announced in a statement issued recently that Airtel-Tigo, MTN and Vodafone will be adjusting their tariffs upwards from November 1, 2018.

The Chamber had explained that the increment is in accordance with the implementation of the new tax laws.

“The government as part of the 2018 mid-year review of the budget amended the Acts referenced above. The objective was to “give effect to the conversion of NHIL and GETFL into levies that are not subject to the input-output mechanism, and de-linking them from VAT by removing the option of input tax deductibility,” thereby giving both levies a unique and different legal identity and distinguished from VAT.

“Our members, who are responsible corporate entities, would comply fully with Ghana’s laws and ensure the distinction between VAT and the new levies emanating from their separate origins and basis in law. As intended, the incidence of the two new levies will thus be on consumers and will result in the increase of the cost of telecommunication service,” the statement said.

A member of the Communications Committee in Parliament, Sam Nartey George, has said the government should be blamed for the imminent increase in the tariffs.

According to him, government deliberately set in motion the processes that have culminated in the decision by the telcos to increase the charges on their data and call services from November 1 with the recalibration of the VAT, NHIL and GETFUND levies

Prior to the presentation of the mid-year budget, the Minority had expressed concerns about a reported increase in the Value Added Tax.

The government however dismissed these reports, with the Finance Minister, Ken Ofori Atta announcing instead that the National Health Insurance Fund Levy and the GETFund component would be separated from the old 17.5% Value Added Tax (VAT) regime, thereby making the two components straight levies of 2.5 percent each.

The Minority maintained that the recalibration of the levies would still result in an increase in taxes, and Sam George believes that the announcement by the telcos has vindicated the Minority.

“When it came to the floor of the House, the Minority opposed it. It’s on record that the Minority held a press conference where we indicated that one of the new taxes to be introduced was a tax on communication services but we were told that we were purveyors of doom and we were liars and that we have been swerved. Well, the truth will expose you when you tell a lie, it’s come home to roost now.”

A Publisher Report