The Ghana Chamber of Telecommunications has announced the decision of telecommunication companies to discontinue the upfront deductions of the Communications Service Tax (CST) from every recharge of consumers.
A recent statement issued by the chamber said telcos had resolved to exact the tax through a tariff adjustment programme beginning November 26, 2019.
According to the chamber, in tandem with this new development, it would fall on the Ghana Revenue Authority (GRA) to do the calculation of the CST.
It also said telcos needed some weeks to complete the reconfiguration of their systems to accommodate the commercial and technical requirement that the exercise necessitated to ensure a smooth experience for consumers.
The chamber said, “For the past few weeks, there have been several discussions on the implementation of the CST. The members of the Ghana Chamber of Telecommunications would like to reassure its customers that we have acted in good faith considering our intentions to engage all relevant agencies following the passage of the CST Amendment Law. The mobile industry considers the upfront deduction legal and implemented the current CST based on alignment with how the Ghana Revenue Authority (GRA) calculates and charges the CST.”
The chamber, however, highlighted, “We understand stakeholders’ concerns and have aligned on the current agreement to implement a price increase to pass on the tax instead of upfront deductions. It is worth noting that despite this arrangement to stop upfront deductions, GRA will still calculate and account for the CST as an upfront charge.”
The CST, introduced in 2008, was fixed at 6 per cent for consumers of some electronic communication services.
However, the Minister of Finance, Ken Ofori-Atta, in his 2019 mid-year budget, announced a 50 per cent increment in the CST.
Telcos were unhappy with this development hence they resorted to deduct CST upfront on all recharges made by their consumers from October 1, this year, with SMS notifications to them.