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Finance Ministry insists telcos must backdate CST implementation

The Ghana Chamber of Telecommunications has disclosed that it is in discussions with the Ghana Revenue Authority (GRA) and the Finance Ministry to maintain 1st October as the date for implementation of the Communication Service Tax.

This follows calls from the GRA for the chamber to calculate the implementation of the tax from the 4th of September and not 1st October as per earlier discussions between the parties.

From the first of October this year, a 9% levy was added to the charges of mobile phone users for communication services.

The Communication Service Tax (CST) was previously set at 6%, however, it was raised to 9% during the presentation of the 2019 Mid-year Budget Review by the Finance Minister.

The Finance Minister, Ken Ofori-Atta, told Parliament that the levy was increased in a bid to build a viable technology ecosystem in Ghana.

A viable technology ecosystem, according to the Minister, involves identifying and combating cybercrime, protecting users of information technology and combating money laundering and other financial crimes.

The Ghana Chamber of Telecommunications explained the implementation of the new levy thus: For every GH¢1 of recharge purchased, a 9% CST fee will be charged leaving GH¢0.93 for the purchase of products and services.

Citi Business News, however, understands that the GRA had initially wanted the telcos to begin implanting the tax on the fourth of September but was not able to do so due to time constraints. The GRA is, however, demanding that the telcos bear the cost of the days the tax was not implemented from the 4th of September to the 1st of October.

Speaking to Citi Business News on the development, CEO of the Ghana Chamber of Telecommunications, Kenneth Ashigbey explained that resetting their records to reflect the 4th of September will have dire consequences on the sector.

“What happened was that early on when the president assented to the amendment what then happened was the chamber wrote to the GRA and the GRA responded on the 4th of September and asked the telcos to apply the amendment immediately.

So, they were talking about the fourth of September and we were saying that it would take some time for us to be able to do the reconfiguration so that’s why we were asking for the 1st of October.

We had a subsequent meeting after meeting GRA where the GRA said it still stood by the letter they had written to us. We had a subsequent meeting with the technical team from the Tax Quality Division of the Ministry of Finance and in that meeting they were also going to brief the Minister and get back to us so we will still write back to the Minister appealing that they start from the 1st of October because it takes a lot do the reconfiguration of the systems to be able to reflect a new one”.

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