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Parliament passes Communications Service Tax bill

Parliament, yesterday, passed the Communications Service Tax (Amendment) Bill but without some of the provisions which had generated controversy.

One of the thorny clauses which require people who receive international calls and send and receive messages by electronic mail to pay the equivalent of six US cents per minute has been removed.

The bill also saw some amendments proposed by the Member of Parliament for Suhum, Mr Frederick Opare-Ansah (NPP), carried on board.

The bill, which is yet to receive presidential accent, enjoins the Minister of Finance to work in collaboration with the Minister of Communications to establish a monitoring mechanism to verify the actual revenue that accrues to service providers for the purpose of computing taxes due the government.

It says the two ministers “shall be given physical access to physical network nodes of the service providers’ network at an equivalent point in the network where the network providers’ billing systems are connected”.

Also in the bill, any service provider who refuses to provide access to its network for the government or its appointed agents commits an offence and is liable to pay a penalty of five per cent of annual gross revenue of the last audited financial statement of the service provider after the first 30 days and if the situation persists after 90 days, the National Communications Authority (NCA) may revoke the licence.

According to the bill, “Any service provider who has an objection to the introduction of any equipment to a physical node on its network shall, within seven days of receiving a request from the Ministry of Finance or its appointed agents, prove before a High Court the reasons for such an objection and how the equipment being introduced offends Subsection (C).”

During the debate prior to the passage of the bill, Mr Opare-Ansah said his proposed amendments were necessary to monitor the revenue of the service providers, so that the government could determine the taxes to be exacted on them.

But Dr Anthony Akoto Osei (NPP, Old Tafo) said the penalty of five per cent of annual gross revenue to be exacted on service providers who refused to provide access to their networks was too exorbitant.

He said that provision would affect the financial fortunes of the telecommunication companies and needed to be considered again.

The Minority Leader, Mr Osei Kyei-Mensah-Bonsu (NPP, Suame), was of the same view, saying the proposed penalty was too punitive.

The Communications Service Tax Law, also known as Talk Tax, was passed in 2008.

In a bid to raise revenue, the government, in the early part of this year, sought to amend it and sent a bill to Parliament for consideration and passage.

In line with the Standing Orders of the House, the Speaker, Mr Edward Doe Adjaho, referred the bill to the Finance Committee of Parliament for consideration and report.

The laying of the report of the committee in the House last week, however, generated a lot of controversy, with the Minority cautioning the government against its passage.

They argued that apart from the fact that some of the provisions breached international conventions, the bill also imposed heavy financial burdens on the citizens.

The bill sought  to, among other things, impose taxes on receivers of international calls and also for the receipt of text messages, as well as electronic mails.

The proposed amount to be charged for each call or e-mail was pegged at the equivalent of six United States cents

In the bill, a telecommunications operator which failed to comply would face sanctions, including a revoking of its operating licence by the NCA.

After a heated debate, Mr Adjaho asked that the bill be withdrawn and sent back to the Finance Committee for re-examination and for all the concerns to be addressed.

Information later available to the Daily Graphic pointed to the fact that the Ghana Chamber of Telecommunications had protested against the proposed imposition of the new tax and had sent a memorandum to Parliament on the issue.

By Mark-Anthony Vinorkor

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