No more upfront CST deductions but it will be embedded in tariffs - Telecom Chamber

Telecommunication companies in the country will from Tuesday, November 26, 2019, stop the upfront deduction of the Communication Service Tax (CST), the Ghana Chamber of Telecommunications has disclosed.

In a statement, the Chamber said it will complete the reconfiguration of its systems to accommodate the commercial and technical requirements for the cessation of the deduction next week to bring respite to consumers.

Currently, customers are charged the 9% CST instantly when they top up airtime.

Speaking to Citi FM, Chief Executive of the Chamber Ken Ashigbey said the CST will be embedded in the tariffs.

"...Due to finish this work by Tuesday the 26 of November, we are hoping that we will complete the configuration, and we can migrate from the upfront deduction to taxing it through the tariff, what it will mean it that now the 9% CST will be embedded within the tariffs so if they are products selling at 1gh the effect of the tariff will be like 7% so that 7% will be added to the original cost of the product so that it will the cost of the service plus the taxes."

Following the implementation of the CST, the Communications Ministry accused the mobile telecommunications companies of milking consumers over their mode of charging.

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According to the sector Minister, Ursula Owusu-Ekuful, all efforts to get the telcos to revert to the situation before the increment has failed as telcos “exact their pound of flesh from their consumers.”

“The Ghana Chamber of Telecommunications wishes to notify mobile and fixed subscribers that effective Tuesday 26th November 2019, Telecommunications Operators will cease upfront deductions of 9%CST charge and apply the tax through a tariff adjustment on their products and services. Following our agreement with the government to apply the 9% CST as a price increase instead of as an upfront deduction on recharge. The reconfiguration of our systems to accommodate the commercial and technical requirements is due to be completed by the 26th of November 2019. This will offer customers a smooth transition and a better experience”, the statement said.

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Subscribers will be notified on the completion of the exercise and for transparency on the adjusted tariffs of their products and services as well as information on the post usage of these services.

“The telecommunications industry remains committed to the socio-economic development of Ghana and that remains our focus and objective”, the statement concluded.