Explainer: Understanding the 9% Communications Service Tax

Explainer: Understanding the 9% Communications Service Tax

- Ghanaians are unhappy about the increase in the CST

- The Ghana Chamber of Telecommunications in a statement have explained why they have to pass on the latest upward adjustment to the consumer

- Our Manifesto: This is what YEN.com.gh believes in

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 for telecommunication services because the cost of providing data and voice by the companies including Vodafone Ghana, AirtelTigo, and MTN Ghana will go up.

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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.

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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.

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YEN.com.gh earlier reported that the director of political affairs at the office of the Vice President, Manaf Ibrahim has been sacked.

The letter signed by the Augustine Blay, secretary of Dr. Mahamudu Bawumia stated that the termination was effective September 30, 2019.

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Source: Yen

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