Telcos to begin charging 9% Communication Service Tax Oct. 1

Telcos to begin charging 9% Communication Service Tax Oct. 1
Source: Ghana | JoyBusiness | JAD
Date: 20-09-2019 Time: 02:09:43:pm

Telecom firms are to begin charging its customers the revised Communication Service Tax (CST) from October 1, 2019, the Ghana Chamber of Telecommunications has said.

The Chamber in a statement issued on Friday said, “The Ghana Chamber of Telecommunications on behalf of its members – AirtelTigo, MTN and Vodafone – wishes to notify its esteemed customers and the general public of the increase in Communication Service Tax.”

“As intended, the incidence of the modification will thus be on consumers. It will impact the cost of telecommunication services,”

The statement added that the “CST, which is now at 9%, will be applied to any recharge purchase. For every ¢1 of recharge purchased, a 9% CST fee will be charged leaving ¢0.93 for the purchase of products and services.”

Finance Minister Ken Ofori-Atta in the Supplementary Budget announced an increase in the Communication Service Tax from 6 to 9 per cent. 
 
According to the finance minister, the increase was to help develop the foundation for a viable technology ecosystem in the county. 
 
This will comprise putting in systems to identify and combat cybercrime, protect users of information technology and combat money laundering and other financial crimes.
 
Mr Ofori-Atta maintains that sharing ratio would be done in a way that the National Youth Employment programs would continue to receive the same portions as the current cycle. In 2018 the tax was first introduced at an Ad Valorem Rate of 6 per cent. 
 
The tax is levied on charges payable by consumers for the use of communication services. 
 
In 2018 the tax brought in a total of ¢420 million, representing a 27.7 per cent increase from the estimated ¢304 million accrued in 2017. 
 
The amount generated from the levy was 4.56 per cent more than the projected ¢401.8 million in the 2018 mid-year budget.