Government Reduces Call Tax From 9% to 5%

The Ministry of Finance, Mr Ken Ofori-Atta has announced a reduction in the Communication Service Tax from nine per cent to five per cent.

According to the sector minister, this is to last for six months.

Finance Minister, Ken Ofori-Atta, announced this on the floor of Parliament today [July 23, 2020] when he was presenting the 2020 Mid-Year Budget Review.

The move which forms part of measures being rolled out by the government in the wake of the COVID-19 pandemic.

 “In the short term, we will reduce the CST from 9% to 5% to reduce the cost of communication services to the consumer as more and more people work remotely and utilize online services.”

“We will count on the Telcos to match this reduction in the CST by reducing their tariffs. This is important for our youth, entrepreneurs, and the burgeoning FINTEC industry,” he added.

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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.

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.