It is the contention of the applicant, Mr Dzifa Gunu, who sued in his capacity as a citizen of Ghana, that the right body to make any administrative decision on how the tax should be implemented is the Ghana Revenue Authority (GRA) and not the Ministry of Communications.

“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,” he argued.

The writ was filed at the Human Rights Division of the Accra High Court on October 31, 2019 by the applicant’s counsel, Mr Godwin Kudzo Tamakloe.

The respondents named on the writ are the Attorney-General (A-G), the Ministry of Communications and Mobile Network Telecommunications (MTN), which is the mobile network the applicant says he is subscribed to.

“Human rights violation”

It is also the case of the applicant that another directive by the Ministry of Communications for the telecommunication companies to stop notifying their subscribers when they deduct the CST was against his fundamental rights to information as enshrined in Article 21 (1) (f) of the 1992 Constitution.

Article 21 (1) (f) states that all persons shall have access to information subject to laws necessary in a democratic society.

According to the applicant, the directive further “runs counter to transparency and openness which are fundamental values of the 1992 Constitution of Ghana and the Rule of Law.”

What does the applicant want?

Among other reliefs, Mr Gunu is seeking a declaration that the directive by the Ministry of Communications is “illegal, unlawful and the usurpation of the powers of the Ghana Revenue Authority within the meaning of the Revenue Administration Act, 2009(Act 791).”

He also wants the court to reverse the directive on telecommunication companies not to notify their subscribers whenever they deduct the CST.

He is further seeking an order for an injunction on the implementation on the directives by mobile network operators until the final determination of the application.

Communications Service Tax

The CST, otherwise known as “Talk Tax” was passed by Parliament in 2008 to increase revenue through a six per cent tax on the value of services provided by mobile telephony providers.

It was amended in 2013 to increase its scope and also address loopholes in the regulations.

During a supplementary budget presented in July this year, the Minister of Finance, Mr Ken Ofori-Atta, announced an increment in the tax from six per cent to nine per cent.

The Finance Minister justified the increment, saying it was aimed at creating a viable technology ecosystem to, among others, identify and combat cybercrime.

Deductions and directives

The telecommunications companies started charging customers the revised CST from October 1, 2019.

They charged it upfront, meaning the CST was immediately deducted when customers upload airtime on their devices, even without making a call or using the internet data.

They explained that that should be the way to go because the tax which they were mandated to collect on behalf of the Ghana Revenue Authority was applicable when airtime was sold and not when it was used.

The increment and the manner in which the CST was being deducted stoked public anger, especially when customers realised that they were being charged even when they were yet to use the services of the telcos.

Directive

In response, the Minister of Communications, Mrs Ursula Owusu Ekuful, directed the telcos to stop the upfront deduction of the CST and treat it as other taxes and levies such as the Valued Added Tax and National Health Insurance Tax Levy (NHIL).

She warned that failure by the telcos to comply with the directive would attract punitive measures such as the withdrawal of their licences.

Compliance

In a statement released by the Ghana Chamber of Telecommunications last Wednesday, the telcos agreed to comply with the directive from the minister by changing the upfront deduction and adjusting their systems for their customers to pay as they consume (per-second billing).

The changes, the Telecoms Chamber said, would take effect by November 26, 2019, as the industry required a number of weeks to complete the reconfiguration of the systems to accommodate the commercial and technical requirement that the exercise necessitated to ensure an even and smooth experience for customers.

A statement signed and issued by the Chief Executive Officer of the Ghana Chamber of Telecommunications, Mr Kenneth Ashigbey, said the decision followed fruitful discussions between the government and industry players.

That, notwithstanding, the statement said the GRA would still calculate and account for the CST as an upfront charge.