Mr. President, Ghanaians woke up on Tuesday July 3, 2013, two days after the 53rd Republic Day celebration to be told that your government has submitted a Bill in Parliament seeking to make Ghanaians pay for receiving international calls from family, friends and business partners in the Diaspora.
Already, the previous John Agyekum Kufuor NPP administration had burdened Ghanaian’s with six per cent tax on every minute of call Ghanaians make to both local and overseas numbers. That tax, called the Communication Service Tax, aka Talk Tax came to replace taxes on the importation of mobile handsets, leading to the influx of cheap phones into the country.
Now government has gone back to its vomit and brought back 20% import tax on handsets, which threatens to make the prices of handsets go up.
So in perspective, what government sought to do was to make Ghanaians pay for calls they receive from abroad and also pay more to acquire mobile handsets. But they have succeeded in doing only one because the other (taxes on incoming calls from abroad) received a gargantuan protest from the public, leading to the suspension of that disingenuously drafted Bill.
What the government has now done is to legalize a hitherto illegal double talk tax, which still threatens to shoot up call rates in the country. Already there was a 6% talk tax on all phone calls, which the telecom operators absorbed on behalf of their customers. But because of the interconnectivity arrangement between the telcos, they tend to pay that tax twice and government was aware but did nothing about it until now that they have rather legalized it to make it mandatory for the telcos to pay double tax on calls.
By way of explanation, the interconnectivity arrangement require that when one makes a call from MTN to Tigo, for instance, MTN would have to pay Tigo a termination rate of 5Gp per minute of that call, plus the 6% tax. So after MTN had borne the 6% tax on behalf of it customer and paid to government, it would also pay another 6% on each 5Gp to Tigo for them to pay to also government again. Clearly, this is double taxation and government has deliberately closed its eyes to it all these years, and now the new law has legalized the double taxation.
In addition to the double talk tax, government has also passed a law to place a 5% Stabilization Levy on the telcos and other sectors in an effort to raise money to stabilize the economy over the next 18 months.
The whole move by government to increase taxes and place taxes on some of the most unimaginable things have been received with grave contempt by Ghanaians; but what is most worrying is the seeming penchant to always want to burden the telecom industry with taxes, levies and charges based on the assumption that these are foreign companies, which have come into Ghana and are making and shipping millions of dollars out every day and are probably not contributing to the development of the country the way they are expected to.
Indeed when Haruna Iddrisu was Communications Minister, his posture towards the telcos was that of one seeking to get as much money from them for the state as possible. That could not be a sin as Ghana needs the taxes and levies to develop. But just before Iddrisu left office he admitted that the telcos were government’s only development partners who stood by government and advanced moneys to government in times of need and ahead of the tax period, to enable government balance its books.
If what the former Communications Minister said is anything to go by, then where is the justification in the several claims by some government officials and consumer rights activists that the telcos are making moneys and shipping them outside and not contributing enough to national development? And why would the Minister wait till he was leaving office before making that admission? It also raises questions as to whether politicians are being honest with their usual hostile comments about telcos.
But at least the Minister admitted the telcos are very important development partners when it comes to providing financial support to cushion the economy in times of need. Secondly, telecom is a utility service just like water and electricity. It is also an essential service, like health, security, water, electricity and others without which everything will come to a halt in this country.Today there are more active mobile phone lines than there are people in Ghana. That is testimony to how much Ghanaians depend on telecoms services and how much of an essential service is it. Indeed the contribution of telecoms to overall national development cannot be overemphasized.
It is because of telecom’s gargantuan importance to the country that Haruna Iddrisu bequeathed Ghana with a very dynamic regulator, the National Communication Authority (NCA), which has left no stone unturned in dealing with telecom operators when they default in service quality. The NCA has over the years instituted fines on the telcos, which lots of Ghanaians think are not harsh and deterrent enough, but at least the NCA has been consistent in fining the telcos for Quality of Service (QoS) breaches.
TELECOMS, WATER AND ELECTRICITY
What Ghanaians have failed to realize is that water and electricity are also gargantuan essential services and the managers of these sectors consistently fail to live up to the service requirement placed on them and yet none of them ever get fined like the telcos are fined consistently. The Energy Commission only goes as far as using the media to say that electricity supply cannot be off for more than 48 hours in a year without prior notice to consumers, so if the service providers default on that, customers deserve compensation. The truth is that the Energy Commission has sat by and watched regular power outages and has never before punished the service provider, neither has anybody been compensated for power outages. The least said about water shortage in this country the better, and yet the sector managers never get punished.
But there is wisdom in not placing such fines on utilities and essential services; these are services that the country cannot do without so the wisdom is to allow them to invest their resources to improve the service so the consumer would get better service, rather than a regulator fining them and using the money for its day to day administrative cost, while the service remain bad and the consumer continues to suffer.
In addition to the fines on telcos for poor quality of service, it seems local government institutions have also found it fun to just place huge charges on telecom operators for various permits. Meanwhile these local government agencies give similar permits to other profit-making organizations for peanuts.
For instance, in some cases where banks, as well as water, electricity, insurance companies pay peanuts for business operation permits, telcos pay more than 1000% more for the same permit. Again, telcos pay sometimes up to 700% more than water and electricity suppliers pay for permit to install underground cables/pipes to provide service. And in times of damage due to government projects, contractors pay for the repairs of cables/pipes belonging to the other utilities, while telcos are mandated to repair their damaged cables/fibre on their own, even though the damage was caused by road construction.
What is even more worrying is that even though telcos pay more for the permit to lay their cables and fibre, when it becomes necessary to relocate the cable/fibre due to road construction, the telcos are mandated to pay for the relocation, while the project contractors pay for relocating water pipes, and electricity cables.
Last year the telcos reported many incidents of fibre cuts mainly by road contractors. National Security has made arrangements to deal with the ‘fight’ between telcos and road contractors, but the problem of fibre cuts keeps rising, this time due to illegal mining (galamsey). Nobody assists the telcos to fix the damages and yet everybody, including yours truly, cry foul, and rightly so, when services are bad. Again the telecoms tower companies have applied for permits to install infrastructure to extend and improve services but thousands of those permits have not been granted. Some of them go zero permit the whole of last year, and other got only one out of the scores they applied for. And none of these government’s permitting agencies get sanctioned for delaying permits, but the telco gets fined if service is not good.
These are obvious issues of unfair treatment to the telcos but government is very lackadaisical to address these issues. Meanwhile, government and its institutions are happy placing fines, charges, taxes and anything that has a name on the telcos just to collect money.