9% upfront deduction of Communication Service Tax ends, Ghana's Telcos Chamber to announce new cost of data

This means that the tax which was earlier charged upfront after an increase from 6 to 9 percent in the mid-year budget, is now being charged as consumers use their airtime or data.

The Chief Executive Officer (CEO) of the Chamber, Ken Ashigbey said this while he spoke to the media after the chamber promised to end the upfront deduction of the tax on November 26 this year.

According to him, all players in the telecommunication space will to this effect unveil a new cost of data and call tariff in line with the Communications Service Tax (CST).

“Yesterday, (November 26), marked the end of the 8-week so the upfront deduction had stopped. You’ll find out that our members had started passing the 9 percent CST onto the tariff. So, you’d find out that the price of the tariff had changed and the only reason is that the tax has been added to it,” he said.

Adding that “What then will happen is that if you bought 10 cedis credit, you will have that on your phone. Then you decide that you buy a bundle of 2 cedis so that bundle will include the CST.”

Mr Ashigbey further assured that once the tariff has changed, the new tariff will be published for the public to know how much the various packages will cost.

The effective rate of the CST is 7% with a 2% VAT totalling 9%.

The Telecommunications Chamber has however advised consumers to be prudent when using data.

“The bundles come with different packages so make sure you subscribe to the one that fits your lifestyle so you don’t feel cheated. Look at the things you want to use the data for and go for the bundle that can take care of all that, otherwise you will feel cheated,” Mr Ashigbey said.

Background

Communications Minister, Ursula Owusu-Ekuful, recently issued a statement directing telecommunication companies in Ghana to stop the upfront deduction of the 9% Communications Service Tax (CST).

This was in a bid to stop telecommunications companies from giving their customers less airtime than they purchased.

This means prices of data packages will be increased by telecoms to accommodate the 9% tax customers are mandated to pay.

Meanwhile, a tax expert has criticized the Ministry of Communications for issuing directives recently on the way the 9% Communications Service Tax should be charged by telcos.

William Kofi Owusu Demitia speaking to Accra based Joy Business said the three directives the Communications Ministry issued to the Mobile Network Operators (MNOs) via a letter to the regulator, the National Communications Authority (NCA), should have come from the Ghana Revenue Authority (GRA).

The Communication Service Tax

The CST, which has been increased from 6% to 9%, has been applied to any recharge purchase by subscribers.

For every GH¢1 of recharge purchased, a 9% CST fee is charged the subscriber leaving ¢0.93 for the purchase of products and services.