Telcos to stop deducting communication tax upfront from November

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The communication tax that brought a lot of distasteful complaints from mobile subscribers is taking a new turn. The increment of the Communications Service Tax was announced by the Finance Minister Ken Ofori-Atta when he was presenting the 2019 Mid-Year Budget review in Parliament last July.

Telcos started deducting the tax upfront when subscribers did a top-up. Complaints from subscribers forced the government to order the telcos to revise how they were deducting the tax.

The Ghana Chamber of Telecommunications (GCT) has released a statement informing “mobile subscribers and the general public that, following fruitful discussions between government and industry; an agreement to stop upfront deduction of CST but rather apply the tax through a tariff adjustment has been reached.”

This was how they were deducting the previous 6% but they decided to deduct it upfront when the communication tax was increased to 9%. The GCT defended that the mobile industry sees the upfront deduction the right way to go about it. Plus, the current CST was implemented in alignment with how the Ghana Revenue Authority (GRA) calculates and charges the CST.

The members of the Ghana Chamber of Telecommunications will like to reassure its customers that we have acted in good faith considering our intentions to engage all relevant agencies following the passage of the CST Amendment Law. The mobile industry considers the upfront deductions legal and implemented the current CST based on alignment with how the Ghana Revenue Authority (GRA) calculates and charges the CST.

However, we understand stakeholders’ concerns and have aligned on the current agreement to implement a price increase to pass on the tax instead of upfront deductions. It is worth noting, that despite this arrangement to stop upfront deductions, GRA will still calculate and account for the CST as an upfront charge.”

The upfront deduction of the communication tax is scheduled to come to an end by November 26, 2019.