Mobile network subscribers are expected to receive more credit for the same amount purchased beginning September 15, 2020, following a slash in Communication Service Tax.
The Mobile Network Operators (MNO) in the country are set to implement the new 5% Communication Service Tax (CST) after the government reduced it from 9% to 5%.
The new tariffs will take effect after the telcos completed discussions with the Ministry of Finance on the modalities for the implementation of the tax cuts which was announced in the approved Mid-Year Budget for 2020.
The Chief Executive Officer of the Ghana Chamber of Telecommunications, Dr Kenneth Ashigbey, told theghanareport.com on Tuesday, August 11, that the new tariff regime will take off the following month.
“If you did per second charge on a voice call or an SMS or a megabyte of data, instead of paying a 9% on CST you would pay 5% CST,” he indicated. “So you will get a lot more”.
The new tariff regime at 5% CST implies that for every GHC10.00 worth of credit, a customer will pay a total tax of GHC 1.92 and had GHC 8.09 to buy voice, SMS, data or any bundle.
Previously, at 9% CST, a customer would have paid a total tax of GHC 2.21 and had GHC 7.80 pesewas to buy voice, SMS, data or any bundle.
This means the consumer would have saved about 30 pesewas on that same amount of credit.
Reason for tax cuts
The aim is to ease the burden on subscribers as the public switch to non-contact communications in the era of COVID-19.
Health experts have advised social distancing to cut physical contact as a measure of halting the contagion that has killed 215 people, with 41,212 confirmed cases and 38,727 recoveries/discharges, according to the Ghana Health Service (GHS) update as of Tuesday, August 11.
Phone calls and internet use have soared not only in Ghana but across the globe, with government institutions, businesses, educational institutions and the entertainment industry, among others, switching to online platforms for operations.
The government has recognised the need for interventions for users even though telcos are one of the biggest gainers of the pandemic with skyrocketing profits.
What is CST
CST is a tax levied on charges for the use of communications services that are provided by electronic communications service providers.
CST is imposed under Section 1 of the Communications Service Tax Act 2008, (Act 754) and CST(Amendment) Act, 2013 (Act 864).
It is paid by consumers to the communications service providers, who in turn pay all CST collected to the Domestic Tax Revenue Division of the Ghana Revenue Authority on a monthly basis.
The Ghana Revenue Authority (GRA) is required under the law, to pay the CST collected into the Consolidated Fund.