Ghana's government wants telcos to pay 9% CST from September

Ghana's Finance Minister announced an increase in Communication Service Tax in July.
The increased CST was implemented in October.
However, the Ghana Revenue Authority wants the telcos to the increased amount from September 4, 2019.

The Ghana Chamber of Telecommunications has indicated that it holding talks with the Ghana Revenue Authority (GRA) and the Finance Ministry to maintain October 1, 2019, as the date implementation of the Communication Service Tax (CST).

This is coming after the GRA told the chamber to calculate the implementation of the tax from September 4, 2019, and not October 1, 2019, as per earlier discussions between the parties.

The CST which was previously set t 6% was increased to 9% during the presentation of the 2019 mid-year budget review by the Finance Minister, Ken Ofori-Atta.

Mr Ofori-Atta explained to Parliament that the levy was increased to help build a viable technology ecosystem in Ghana.

Subsequently, the Ghana Chamber of Telecommunications explained that the 9% CST meant that for every GHC1 of recharge purchased, the customer will have GHC0.93 for the purchase of products and services.

After the announcement, the GRA wanted the telcos to begin implementing the tax on September 4. However, they were not able to do it due to some constraints.

But the GRA is requesting that the telcos bear the cost of the days the tax was not implemented from September 4 to October 1.

CEO of the Ghana Chamber of Telecommunications, Kenneth Ashigbey told Accra-based Citi FM that they will face dire consequences if they reset their records to meet the demands of the GRA.

“What happened was that early on when the president assented to the amendment what then happened was the chamber wrote to the GRA and the GRA responded on the 4th of September and asked the telcos to apply the amendment immediately.

So, they were talking about the fourth of September and we were saying that it would take some time for us to be able to do the reconfiguration so that’s why we were asking for the 1st of October.

We had a subsequent meeting after meeting GRA where the GRA said it still stood by the letter they had written to us. We had a subsequent meeting with the technical team from the Tax Quality Division of the Ministry of Finance and in that meeting they were also going to brief the Minister and get back to us so we will still write back to the Minister appealing that they start from the 1st of October because it takes a lot do the reconfiguration of the systems to be able to reflect a new one.”