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31.10.2019 Business & Finance

CST: No More Upfront Deduction From November 26

By Simon A. Tetteh
CST: No More Upfront Deduction From November 26
LISTEN OCT 31, 2019

Government through tariff adjustment of the Communications Service Tax (CST) will be implementing a price increase to pass on the tax instead of an initial upfront deduction.

The Ghana Chamber of Telecommunications in a release issued stated that government in an agreement with industry players have to stop the upfront deduction of CST but through a tariff adjustment.

The implementation which takes effect on the 26th November, 2019 will be a price increase to pass on the tax instead of upfront deductions. "The price increase will take effect 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 an even smoother experience for customers."

The statement added that “despite this arrangement to stop upfront deductions, GRA will still calculate and account for the CST as an upfront charge.”

"This will increase the purchase price instead of purchasing and being deducted," the statement noted.

The telcos says the upfront deduction was legal however, they will heed to the current CST based on alignment with Ghana Revenue Authority (GRA) billing system.

The Minister of Communications, Hon. Ursula Owusu earlier warned to sanctioned Mobile Network Operators (MNOs) if upfront deductions of the CST is not halted.

But the Minister in subsequent interviews revealed on Joy FM’s super morning show that her outfit will be engaging the MNOs to deliberate on how best they can find a lasting solution to the upfront deduction of the Communications Service Tax (CST).

The conclusion of the meeting, per the statement released by the Ghana Chamber of Telecommunications, is to increase the price in the tariff.

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