Telecom Chamber to meet Ministry of Communications over 50% increment of CST

By Justice Kofi Bimpeh
Kenneth Ashigbey
Kenneth Ashigbey

The Chamber of Telecommunications will on Wednesday meet with the Ministry of Communications to further deliberate on the proposed increment in the Communication Service Tax, CST from 6 to 9 percent.

Finance Minister, Ken Ofori-Atta during the mid-year budget presentation announce an increment in the Communication Service Tax, CST.

The communications service tax (CST) is levied on charges for the use of communications services that are provided by operators in the country.

It is imposed under Section One of the Communications Service Tax Act 2008, (Act 754) and paid by consumers of the communications service providers who in turn pay all the tax collected to the Domestic Tax Revenue Division of the Ghana Revenue Authority (GRA) on a monthly basis.

Last year, tax revenue collected from consumers for using communication services in the country reached ¢420 million, representing an increase of 27.7 percent.

The amount generated from the communications service tax (CST) was 4.56 percent more than the projected ¢401.8 million in the 2018 mid-year budget.

Despite these gains, the Finance Minister in his presentation told Parliament “government proposes to increase the tax to nine percent to develop the foundation for the creation of a viable technology ecosystem in the country.

“This will comprise amongst others putting in systems to identify and combat cybercrime, protect users of information technology and combat money laundering and other financial crimes,” he added.

Telecom Chamber reacts 

The Chamber of Telecommunications Ghana said the increment announced by the Finance Minister for the Communication Service Tax comes as a surprise to them.

 Reacting to the announcement by the Finance Minister, CEO for the Telecom Chamber, Kenneth Ashigbey said "There is normally a tax dialogue where the Ministry of Finance, the GRA and a lot of taxpaying entities where will all seat together but this do not happen before this year's mid-year review so for us it just came as a surprise, we were not expecting communication services tax to go up especially for this government that has been pushing the digital agenda and for you to be able to do this what is required is telecommunication services and it impacts on everybody in the economy, by increasing CST bare in mind last year based on the re-engineering of BAT and the two levies and all of that there was an increase of the taxation on consumers and you are going to slam this on them?

"If you are not careful because the demand for telecommunication is not inelastic if you not careful the maximum return on this increment might you might not raise the additional tax that you want....," he added.