GhanaTelecom

Telcos reduce Communications Service Tax

The Communications Service Tax (CST) was increased from 6% to 9% in October 2019, but it has now been reduced to 5%

Mobile network operators have effected the 4 percentage-point reduction in the Communications Service Tax (CST) for customers, as directed by the government.

The reduction, which took effect from 15 September, leaves the charge at 5% of the value of products and services, in accordance with the passage of the Communications Service Tax (Amendment) Act 2020 (Act 1025).

The Ghana Chamber of Telecommunications announced the implementation of the new rate this week.

In a statement, the Chamber said the telecoms companies will apply the new 5% CST charge through a tariff adjustment on products and services.

“The tariff adjustment programme means when our customers pay the same price they would enjoy more, which is in line with the government’s measures in alleviating the cost burden on citizens in the wake of the [COVID-19] pandemic,” said the statement, signed by the chief executive of the Chamber, Ken Ashigbey.

Reconfiguration

He said mobile network operators will adjust the tariffs of their products and services accordingly.

“The smooth reconfiguration of service providers’ systems to accommodate the commercial and technical requirements is a testament of the effective dialogue and stakeholder engagements led by the Finance Ministry as well as our supervising ministry and agencies,” he said.

Ashigbey added: “Mobile network operators will notify their customers on the completion of the modification exercise and provide further transparency on the adjusted tariffs of their products and services while offering other relevant information post usage of these services.

“The mobile industry remains committed to the socio-economic development of Ghana and that remains our sole object and focus on driving and supporting Ghana’s digitisation agenda.”

Government intervention

Meanwhile, Ursula-Owusu-Ekuful, Minister of Communications, is urging consumers to report any operator that goes contrary to the law so that the regulator can sanction them.

“We worked with the networks, Ghana Revenue Authority (GRA) and Ministry of Finance to go through all the processes to ensure that from 15 September, we can stop deducting 9% of CST and reduce it to 5%. They are ready; they’ve assured me that their systems are ready. So please, I would urge all of you [consumers] to assist us with the feedback.

“If for some reason you don’t see a noticeable reduction in the cost of mobile telephony services, both voice and data; they’re still deducting the full 9%. Kindly notify us and the NCA [National Communications Authority], and we will take action,” she said.

The CST was introduced in 2008 at an ad valorem rate of 6%. The tax is levied on charges payable by consumers for the use of communication services.

The telcos started charging customers the revised CST from 1 October 2019 after Ken Ofori-Atta, the Minister for Finance, announced an increment in the tax from 6% to 9% in the Supplementary Budget.

Ofori-Atta, in justifying the increment, said it was aimed at creating a viable technology ecosystem to identify and combat cybercrime, among other things.

However, he later announced that the talk tax will be reduced in response to the coronavirus pandemic.

He said the government decided to effect the reduction to lessen the burden of the effect of the pandemic on Ghanaians.

The reduction from 9% to 5% will come as a relief to customers, who will now spend less on internet data and call credit.

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Source
Starrfm.com.gh
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