Government has announced a reduction of the communications service tax from its up 9 percent to 5 percent.
This, according to the Finance Minister is to cushion Ghanaians from the hardship the coronavirus pandemic has brought unto them.
“In the short term, we will reduce the CST from 9% to 5% to reduce the cost of communication services to the consumer as more and more people work remotely and utilize online services. We willcount on the Telcos to match this reduction in the CST by reducing their tariffs. This is important for our youth, entrepreneurs and the burgeoning FINTEC industry”.
Government Increases Communications Service Tax
Ghana’s Finance Minister Ken Ofori-Atta announced an increase in the Communication Service Tax (CST) during the presentation of the 2019 mid-year budget review to parliament.
The CST was increased from 6% to 9% by the NPP government in June and took effect on October 1, 2019.
The Finance Minister’s announcement simply means, Ghanaians will pay more telecommunication services because the cost of providing data and voice by the companies including Vodafone Ghana, AirtelTigo, and MTN Ghana will go up.
The Chamber of Telecommunications in a statement after the minister made the announcement said: “The CST, has been increased from six% to 9% and would be applied to any recharge purchased by customers.”
The telcos explained that they are already burdened by numerous taxes.
It is important to note that the service providers were absorbing the CST when it was only 6% but they decided to pass it on to the consumer following the recent increase to 9%.
So with the coming into effect of the CST, it means for every GHC 1.00 worth of recharge purchased, a 9% CST fee would be charged leaving GHC 0.93% for purchase of products and services.
The Communication Service Tax is deducted the very moment a consumer loads the credit.
This is because the Ghana Revenue Authority takes it’s percentage within a number of days and won’t wait for a customer to finish their credit.
So far since the telcos began charging the new CST, Ghanaians have raised concerns over the upward adjustment.