In an attempt to walk the fine line of meeting government’s revised total revenue and grants target of GHC 58.9 billion, while avoiding overtaxing its citizens, the Finance Minister Ken Ofori-Atta has made a number of proposals, key amongst them is the proposed increase in the Communications Service Tax (CST) from 6 to 9 percent.
According to the Finance Minister, the increase to 9 percent will help in developing the foundation for the creation of a viable technology ecosystem in the country.
But for the Chief Executive of the Ghana Chamber of Telecommunications Kenneth Ashigbey, even though they were surprised by the proposed increase, they are still urging the government to open the issue up for further deliberation to ensure it doesn’t become counterproductive.
“Looking into the document I didn’t hear anything about implementation. That’s where sometimes the engagement with government is important. Because apart from the implementation time, you should bear in mind that the government would expect a marginal return on this increase to be positive.
But the elasticity of demand for telecommunication service is not inelastic. People are already complaining about the high incidence of taxes. The increase might result in decreased demand thereby affecting the projections for the CST.”