The Ghana National Chamber of Commerce and Industry has lauded government for its decision to reduce the Communication Service Tax, also known as ‘Talk Tax’ from 9 to five percent.
As part of efforts to mitigate the economic impact of Covid-19 on individual consumers and businesses, government announced the reduction in the Mid-year budget to take effect from September this year.
The Chief Executive Officer of the Ghana National Chamber of Commerce and Industry, Mark Badu Aboagye, told Citi Business News the intervention is commendable.
“The reduction in communication service tax is a welcoming news. There is now increasing use of data and airtime by businesses. In fact, to ensure workplace safety and also ensure social distancing a lot of employees are now working remotely and I think this will go a long way to reduce their communication cost and overall cost of business”
Background of CST
The Communication Service Tax (CST) was introduced in 2008 at an ad valorem rate of six per cent. The tax is levied on charges payable by consumers for the use of communication services.
In 2018, the tax brought in a total of GH¢420 million, representing a 27.7 per cent increase from the estimated ¢304 million accrued in 2017.
The amount generated from the levy was 4.56 per cent more than the projected ¢401.8 million in the 2018 mid-year budget.
However, government in the main budget for 2020 delivered in November 2019, amended the CST Act, increasing it from six percent to nine percent. It took effect from October 1, 2019.
This led to increased agitation among many customers of mobile telecommunication companies, who changed the mode of application that angered government.
But following a directive from the Ministry of Communications, upfront talk tax deductions were ceased.