Mobile phone operators have again laid bare their frustrations with government on the yet to be implemented Communication Service Tax (CST), arguing that the tax system exposes consumers to double taxation. The new tax, which was launched on Friday, is expected to be operational next week June 1, and will comprise six per cent tax charge on the face value of recharge (credit) cards for pre paid consumers for the provision of communication services. However, telecom operators say there are a number of implementation challenges which government has not addressed. According to the mobile phone service providers, since consumers will pay the tax at the time of purchase of prepaid recharge cards, government's decision to collect the taxes from the gross revenue of service providers as stipulated in CST (Act 754) is inappropriate. At a seminar to educate mobile phone operators on the talk tax in Accra, the service providers challenged government to review that section of the law since their gross revenue includes revenue accruing from interconnectivity charges. "Since the talk tax is aimed at mobile phone consumers, government has absolutely no right to tax the CST on the gross revenue of operators as the operators are not consumers given that the gross revenue comprises other interconnectivity bills. "Besides, the caller has already paid for the tax on purchase of the re-charge card so taxing on the gross revenue of operators is not appropriate and amounts to double taxation and government must take a second look at the implementation and collection of the talk tax," they argued. Another concern to the operators is that there is no uniformity in the discounts given to their recharge card dealers. As a result, the volume of cards sold to consumers may not reflect the value of the cards at the operators end. Consequently, they have called on government to charge the CST on the airtime used by subscribers. The Commissioner of the VAT Service, the agency mandated to implement the talk tax, Anthony Ewereko Minlah, explained that the decision to charge the tax on recharge cards at the retail end is to ensure that consumers pay the right taxes even when they do not use the card. "VAT Service are just tax enforcers and cannot operate outside the law, so if the operators have other concerns with the implementation and collection of the CST, they should go to the law makers. We’ll thus advise them to form a committee to lobby the legislature on how to address their concerns," he said. He said, the Service would also put forward their grievances but that should not stop the government from implementing the talk tax on June 1, 2008. The implementation of the new tax system, which the President has given his assent to a couple of months ago, has been delayed to allow telecommunication companies to reconfigure their systems to ensure smooth operation of the tax system. With a mobile user population of more than eight million culminating in a tele-density of about 25 per cent plus internet users of about one million, the talk tax is anticipated to contribute largely to government's tax mobilization efforts. Source: B&FT