No more upfront CST deduction – Telecoms Chamber

The Ghana Chamber of Telecommunications has announced it has agreed with the government to stop the upfront deduction of the Communication Service Tax (CST) which has bedevilled mobile subscribers in the country.

“The Ghana Chamber of Telecommunications wishes to inform mobile subscribers and the general public that, following fruitful discussions between government and industry; an agreement to stop upfront deduction of CST but rather apply the tax through a tariff adjustment has been reached,” the Chamber said in a statement.

It is recalled the Ministry of Communication directed the National Communication Authority (NCA) to have all mobile phone network operators stop deducting the nine per cent CST upfront and also stop sending customers notifications of the CST deductions but that did not sit well with the telcos.

The ministry said in a statement on Friday, 11 October 2019 that: “To minimise the negative impact of the current mode of deduction of the CST, the Ministry of Communication hereby directs the immediate implementation of the following measure: 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”.

“These extraordinary upfront deductions of CST and notification of same to the subscribers must stop with immediate effect,” the ministry added.

The ministry also ordered the telcos to stop giving expiry dates to bundled data.

“All unused data and voice bundles purchased by subscribers do not expire and must be rolled over with the next recharge”, the statement ordered, adding: “MNOs [Mobile Network Operators] will be subjected to strict compliance with existing Quality of Service (QoS) standards to ensure value for the subscribers’ money in accordance with their licence obligations.”

Some members of the Minority including Ningo Prampram MP Sam Nartey George asked the government to stop intimidating the telcos and instead reverse what he described as the “nuisance” increase in the CST.

The Chamber in its statement said despite this arrangement to stop upfront deductions, the Ghana Revenue Authority (GRA) will still calculate and account for the CST as an upfront charge.

“The price increase will take effect by November 26th 2019, as the industry requires a number of weeks to complete the reconfiguration of our systems to accommodate the commercial and technical requirement that the exercise necessitates to ensure an even smooth experience for customers,” the statement explained.



Read full statement below:

MOBILE INDUSTRY ALIGNS WITH GOVERNMENT ON COMMUNICATIONS SERVICE TAX (CSINCREASE IMPLEMENTATION.

The Ghana Chamber of Telecommunications wishes to inform mobile subscribers and the general public that, following fruitful discussions between government and industry; an agreement to stop upfront deduction of CST but rather apply the tax through a tariff adjustment has been reached.

For the past few weeks, there have been several discussions on the implementation of the CST. The members of the Ghana Chamber of Telecommunications will like to reassure its customers that we have acted in good faith considering our intentions to engage all relevant agencies following the passage of the CST Amendment Law. The mobile industry considers the upfront deductions legal and implemented the current CST based on alignment with how the Ghana Revenue Authority (GRA) calculates and charges the CST.

However, we understand stakeholders’ concerns and have aligned on the current agreement to implement a price increase to pass on the tax instead of upfront deductions. It is worth noting, that despite this arrangement to stop upfront deductions, GRA will still calculate and account for the CST as an upfront charge.

The price increase will take effect by November 26th 2019, as the industry requires a number of weeks to complete the reconfiguration of our systems to accommodate the commercial and technical requirement that the exercise necessitates to ensure an even smooth experience for customers. We acknowledge the Ministry of Communications, Ministry of Finance, the National Communications Authority (NCA) and GRA for their support and understanding in this matter.

We wish to thank our customers, for their patience and continued patronage of our services over the past several weeks following the CST amendment implementation. During the transition period from upfront payments to the pass-through payment of the CST through a tariff increase, our members have resolved to give extra value to reward customers for their loyalty. Subsequently mobile operators will notify their customers individually in the ensuing days.