Telcos in Ghana to start charging 9% Communication Service Tax Oct. 1

The Ghana Chamber of Telecommunications has said that the telecom firms in Ghana will begin charging customers the revised Communication Service Tax (CST) from October 1, 2019.

Telcos in Ghana

In a statement issued by the Chamber on Friday, it 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 also indicated that “CST, which is now at 9%, will be applied to any recharge purchase. For every GH¢ 1 of recharge purchased, a 9% CST fee will be charged leaving GhS0.91 for purchase of products and services.”

The Finance Minister, Ken Ofori-Atta in the Supplementary Budget announced an increase in the Communication Service Tax from 6% to 9%.

Mr Ofori-Atta explained that 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.

The minister added that the sharing ratio would be done in a way that the National Youth Employment programs would still receive the same portions as the current cycle. In 2018 the tax was first introduced at an Ad Valorem Rate of 6%. 

The tax is levied on charges payable by consumers for the use of communication services. 

In 2018 the tax brought in a total of GH¢420 million, representing a 27.7% increase from the estimated GH¢304 million accrued in 2017. 

The amount generated from the levy was 4.56% more than the projected GH¢401.8 million in the 2018 mid-year budget.

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