4% 'Talk tax' reduction to take effect Tuesday

The four per cent reduction in Communications Service Tax (CST) will take effect Tuesday, September 15, 2020.

The Minister of Finance, Mr Ken Ofori-Atta at the presentation of the 2020 mid-year budget review in July announced the reduction of the tax from nine per cent to five per cent.

A statement from the Ghana Chamber of Telecommunications on Monday the modifications would represent 5% CST charge and would be applied through a tariff adjustment on products and services.

It added that the Mobile Network Operators would notify customers on the completion of the modification exercise and provide further transparency on the adjusted tariffs of their products and services while offering other relevant information post usage of the services.

The 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.

The telcos started charging customers the revised CST from October 1, 2019, after the Minister of Finance, Mr Ken Ofori-Atta, announced an increment in the tax from six to nine per cent in the Supplementary Budget.

The Finance Minister in justifying the increment had said it was aimed at creating a viable technology ecosystem to among other things identify and combat cybercrime.