GRA Calls NCA’s Bluff

The Ghana Revenue Authority (GRA) has called the bluff of the National Communications Authority (NCA) after the telecoms regulator had directed Subah Infosolutions to stop its monitoring of telcos’ revenue by Thursday, 12th November.

The industry regulator, in a letter dated October 30, 2015, gave Subah a two-week ultimatum to discontinue the revenue monitoring exercise after describing its operations in the telecoms sector as ‘illegal’.

According to the NCA in the said letter signed by its acting Director-General, William Tevie, it has reviewed the contract between GRA and Subah, particularly Subah's core obligations under the contract, and come to the conclusion that a licence is required from the Authority to execute that mandate.

The GRA contract with Subah Infosolutions is due to end in May, 2016 after it was renewed this year; but the NCA in its October 30, letter advised Subah to take “immediate steps in any event no later than Thursday, 12th November 2015 to cease operations in the telecommunications sector -- failing which the Authority will not hesitate to apply the prescribed sanctions under its enabling statutes”.

The NCA further followed up with another letter (dated November 4th, 2015) to heads of all telecom companies in the country to discontinue their operations with Subah after November 12th -- instead directing them to work with Afriwave Ghana Telecoms, which has been granted licence by the regulator to operate an Interconnect Clearing House (ICH) facility.

GRA’s swift response

However, the Ghana Revenue Authority (GRA) responded swiftly to the NCA’s directive to the telcos and said the telcos should disregard the regulator’s directive and continue working with Subah Infosolutions.

The GRA letter dated November 5th and signed by its Commissioner George Blankson, as seen by the B&FT, reminded the telecom companies of their obligation under provisions of the Communications Service Tax (Amendment) Act, 2013 (Act 864) to continue granting access to Messrs. Subah Infosolutions, acting on behalf of the GRA in the performance of GRA's statutory obligation of monitoring revenues under Act 864 as well as revenues accruing from levies under the Electronic Communications Act 2009, (Act 775).

The revenue collection authority further stated that Subah’s revenue monitoring activities do not require a licence from the operator -- in the same way a “GRA agent contracted to audit a hospital is not required by law to hold a licence of the Ghana Medical and Dental Council”.

The GRA Commissioner reiterated that indeed Subah Infosolutions has a valid contract to monitor Communications Service Tax on behalf of GRA till May 2016.

Warning to Telcos

According to the revenue authority, telecom companies that decide to heed the NCA’s call do so at the peril of hefty fines.

“… A telco commits an offence if it ceases to provide the GRA (and for that matter Messrs. Subah Infosolutions access to its network, and will be liable to pay a penalty of five (5) percent of the annual gross revenue indicated by the last audited financial statement after the first thirty (30) days,” the letter warned.

Some industry watchers have described the approach of the regulator as “surprising”, considering the fact that Subah Infosolutions had gone about its monitoring operations for the past five and half years only for the NCA to reveal that it lacked the requisite operating licence.

One analyst, who asked not to be named, was of the view the NCA could have done a better job; especially after it played an instrumental role in a committee that cleared Subah Infosolutions of wrongdoing in 2014 when it was investigated for alleged fraudulent activities.

The said Committee was headed by the Finance Ministry’s Dr. Edward Larbi-Siaw where the NCA was represented by Kwame Baah Acheamfour, Abena K. Asafo-Adjei, Albert Enniful and Henry Kanor in addition to officials from Subah.

The committee, after deliberating on Subah’s mandate as stated in its contract with GRA said: “On the issue of setting aside the agreement, the committee concluded that the service agreement is a valid contract and cannot be set aside”.

Despite the fact that there’s a court action pending on commencement of the Interconnect Clearing House (ICH) facility, the NCA proceeded to direct telecoms companies to deal with Afriwave Ghana Telecom which will man the ICH, a situation that causes some industry watchers to raise eyebrows.

MP for Obuasi West, Kweku Kwarteng -- who together with two others took the matter to court -- said the ICH “unjustifiably interferes with their fundamental human rights to freedom from interference with their communication and correspondence”.

The ICH case resumed on November 2nd, but was adjourned for a fortnight.