The Communications Service Tax (CST) will be reduced from 9 per cent to 5 per cent, the Finance Minister has announced.
Ken Ofori-Atta said the decision to reduce the cost for most Ghanaians is as a result of the huge numbers in the population working remotely and utilising online services.
Mr Ofori-Atta announced this in the 2020 mid-year budget review presented to Parliament on Thursday, July 23.
CST, popularly known as Talk Tax, was introduced in 2008.
But Act 754 was amended in 2013 as Act 864.
The CST was increased last year from 6 per cent to 9 per cent on all communication services, a move that appeared not to have gone down well with the telecommunication companies in Ghana.
They, therefore, decided to deduct the tax upfront, which generated agitations among users.
The Ministry of Communications, consequently, engaged the telcos, directing them to cease the immediate deduction.
“CST should be treated the same way VAT, NHIL, GETFUND Levy and all other taxes and levies imposed on entities doing business in Ghana are treated. This extraordinary upfront deduction of CST and notification of same to subscribers must stop with immediate effect.”
The telcos obliged by deducting the tax during usage of talk time.
On Thursday, Mr Ofori-Atta expressed hope that telcos will reduce their tariffs to reflect the reduction in the CST, which reduces further to 5 per cent.
“In the short term, we will reduce the CST from 9 percent to 5 percent to reduce the cost of communication services to the consumer as more and more people work remotely and utilize online services,” the Minister of Finance stated.
“We hope we can count on the Telcos to also match this reduction in the CST by reducing their tariffs.”
By Emmanuel Kwame Amoh|3news.com|Ghana