Telcos in Ghana are still charging 9% CST upfront on recharge despite Minister’s directive

The Communication Service Tax has been increased to 9%.
The telcos are charging the 9% upfront on recharges but the government has ordered them to stop.
However, the telcos are still charging the CST upfront.

Consumers of Ghana’s mobile telecommunication services are still paying the 9% Communication Service Tax (CST) upfront on recharges over a week after the Minister of Communication ordered that the practice is stopped.

The Minister of Communications Ursula Owusu-Ekuful said the telcos operating in the country are being disingenuous in their deduction of the CST. She argued that hitherto they did not deduct upfront from recharges made by consumers.

“The Ministry met mobile network operators and the regulator on 7th and 8th October 2019 on this unusual practice which flew in the face of industry experience and we were informed by MNOs that they took advantage of the 3% increase to pass on the entire tax to subscribers.”

“CST should be treated the same way VAT, GETFUND, NHI levy and all other taxes imposed on entities doing business in Ghana are treated. The extraordinary upfront deduction of CST and notification of the same to subscribers must stop with immediate effect,” the Minister added.

While the Minister demanded an immediate stop to the practice, the directive was not received well by the telcos. Meanwhile, the telcos are still holding discussions with the government to conclude issues surrounding the implementation of the CST.

Aside from the challenge with the upfront deduction of the CST, the start date of the tax has also been a matter of disagreement between the two parties.

The telcos started implementing the CST since October 1, 2019. But the government said the actual implementation date should be backdated to September 4, 2019.