The government of Ghana intends cutting the Communication Service Tax (CST) from 9% to 5%, Finance Minister Ken Ofori-Atta has said.
“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 utilise online services”, Mr Ofori-Atta told Parliament on Thursday, 23 July 2020 when he presented the 2020 mid-year budget review.
“We will count on the telcos to match this reduction in the CST by reducing their tariffs”, he announced, adding: “This is important for our youth, entrepreneurs and the burgeoning fintec industry”.
Last year, the CST was increased from 6% to 9%. It was applied to airtime and data purchased by subscribers.
The Communication Ministry subsequently ordered Mobile Network Operators (MNOs) to stop passing on the 9% CST to subscribers.
In a letter addressed to the National Communications Authority (NCA), the Communication Ministry stated that the 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.
He said “the future is about digitalisation”, pointing out that: “Data is now becoming as essential as water and electricity, especially for our youth and businesses”.
“The COVID-19 pandemic has reaffirmed this, especially as more people work remotely and also access education and health services”, the minister said.
According to him, “This caring government has worked diligently to digitalise the economy over the last three and half years”.
“We need to further speed up the digitalisation effort where every citizen nationwide has access to the internet and other digital services”, Mr Ofori-Atta noted.
As such, he said, “going forward, government will work with the telcos and ECG to rollout fibre across the country on the back of the electricity distribution network so every citizen nationwide will have access to high speed broadband”.