Coronavirus: 50% removal of CST will provide relief for Ghanaians - Mahama

Former President John Mahama has appealed to the government to withdraw the 50 percent increase in the Communication Service Tax (CST).

He urged the government to consider voice and Internet services as an essential commodity and ensure that it was provided at a cheaper rate to consumers who had been forced to stay at home as part of measures to stop the spread of COVID-19.

According to him, the increase in the CST by the current government from the six to nine percent had brought untold hardship on the Ghanaian telecom users and businesses amid COVID-19.

He made this known when he announced a support package for 20,000 households within the partial lockdown areas in Accra, Kumasi, and Kasoa at his office in Accra.

Mahama said the government could offer a free six-month extension of licenses of telecommunications whose licenses were about to expire so that the value could be applied to cushion consumers during the three months.

"Additionally, the Telcos can also be compensated with funds from the Ghana Investment Fund for Electronic Communication (GIFEC), which already has the mandate to ensure universal access to telecommunication," he said.

He stated: "The removal of the 50 percent increase in the Communication Service Tax (CST) will provide further relief for the many who are having to work or stay at home at this time."

About CST

The Communication Service Tax (CST) was introduced in 2008 at an ad valorem rate of six percent. 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 percent increase from the estimated ¢304 million accrued in 2017.

The amount generated from the levy was 4.56 percent 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, Ken Ofori-Atta, announced an increment in the tax from six to nine percent in the Supplementary Budget.