NCA audit: Vodafone sets the record straight

Vodafone Ghana says its attention has been drawn to a document making the rounds concerning a National Communications Authority (NCA) audit that imposed fines on the company last year. Vodafone understands the depth of government and public interest in this issue and is committed to lay bare the facts accurately and in a transparent manner.

In a statement, Vodafone said it wishes to emphasise that as a company, its code of business ethics, reporting standards and governance processes do not compromise on any financial malfeasance. Vodafone reports on its business and financial performance, on a monthly basis, to the Government of Ghana (GoG) which is a 30% shareholder. Vodafone is audited by the reputable external auditors, Pricewaterhouse Coopers (PWC). 

Vodafone’s operations as a multinational company listed on major stock exchanges across the globe; do not countenance practises that could impact on its market value and global reputation. It is pertinent to point out that in 2012; Vodafone was lauded by the Ghana Revenue Authority (GRA) as one of the highest corporate taxpayers in the country, due to the importance it places on being a good corporate citizen.

As a responsible company with a huge reputation as the most admired telecoms brand in Ghana, Vodafone wants to make the following clarifications:

The NCA audit

It is an established fact that the NCA commissioned an independent revenue assurance audit in February 2013 into Vodafone’s operations and that of other Operators at different times. The audit was required to look at revenues reported for the period January 1, 2008 to June 30, 2011. The audit, which verified the accuracy of revenue reporting, was performed by Messrs Boateng, Offei & Co on behalf of the NCA from February 2013 and completed in October 2013.

It is very important to point out that:

1.The outcome of the audit found no evidence of under declaration of revenue and the auditors did not reach any such conclusions in their final report on the activities of Vodafone Ghana.

 2. Vodafone’s operations were never found to have caused any tax revenue losses to government.

Subsequent to the audit, the NCA imposed two fines on Vodafone as follows:


- 1% of regulatory fee liability -  GHC¢1,632,982.13

- Regulatory penalty for providing handling fees to International Carriers for terminating  International Incoming Traffic -  GHC¢18,824,000

Regulatory fees liability

The regulatory fee liability based on the Auditor’s report was partly as a result of the non-payment of regulatory fees by Ghana Telecom in 2008 before Vodafone acquired 70% stake in the company, and partly due to a difference in interpretation as to whether sale of equipment and handsets are regulated services under the allocated telecommunications licence.

Regulatory penalty on International Incoming Traffic (ITT)

The regulatory penalty on International Incoming Traffic was due to lack of clarity on the treatment of any handling fees given to International Carriers for terminating ITT. The price per minute of ITT was regulated at 0.19 USD cents and Vodafone was fully complying by charging and reporting the regulated price. Vodafone was also computing and paying all Government taxes and levies on the stipulated price as confirmed by the Auditor’s report.

The fact that Vodafone was providing handling fees to International Carriers for securing its traffic from going via SIMbox fraudsters was perceived by the NCA, based on an ambiguous regulatory clause, as a regulatory breach (not a revenue assurance breach) and that accounted for the penalty.

Vodafone in Ghana

Vodafone Group alone has invested in excess of USD$1 billion in Vodafone Ghana since acquiring a 70% stake in Ghana Telecom in 2009. Vodafone’s operations in Ghana have a direct impact on the social and economic development and have transformed the telecommunications industry through the provision of value added, innovative products and services in both the Consumer and Enterprise spaces. The Vodafone Ghana Foundation continues to support the use of technology in a way that delivers social and economic dividends.

In the name of fairness and transparency, Vodafone reserves the right to exercise all available options, including legal, against any individual or group, who impugns on the hard won image and reputation of the company by peddling falsehoods about this issue.


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