Chief Executive Officer of the Ghana Chamber of Telecommunications, Kenneth Ashigbey, has called for a review of taxes charged telecommunication companies in the country by government.
Mr Ashigbey speaking at the launch of a total tax distribution study by the Chamber, lamented the varying tax components asserting it is overburdening telcos in the country.
He also noted that the taxes charged can undermine government’s plan to expand telecommunication infrastructure to the underserved and unserved Ghanaian population.
The study by the Chamber revealed that total taxes paid to government in 2019 alone amounted to Ghs 3.2 billion, representing 9.5 per cent of Ghana’s total annual tax earnings.
Taxes paid by telcos among others include; corporate tax, communication service tax, value added tax (VAT) and witholding tax.
Speaking to the media after his presentation, Mr Ashigbey, averred the 5 per cent CST tax charges on telcos should be scrapped.
“We need to find ways of taking CST out of the tax component of telcos, for me CST has to go to zero and the other taxes reviewed,” he said.
The Finance Minister, Ken Ofori-Atta, in the 2020 Mid-year Budget Review, announced a 4 per cent reduction in the CST from 9 per cent to 5 per cent as part of the COVID-19 relief packages.
The 4 per cent reduction followed a 3 per cent increment in the CST from 6 per cent to 9 per cent in the 2019 Mid-year Budget Review.
In a statement released on Monday, September 14, 2020, the Ghana Chamber of Telecommunications said: “Mobile network operators will adjust tariffs to reflect the 4 per cent reduction in Communications Service Tax by Tuesday 15th of September 2020.”
The statement said the modifications will represent 5 per cent CST charge and would be applied through a tariff adjustment on the products and services of the Mobile Network Operators, per the passage of the Communication Services Tax (Amendment) Act, 2020 (Act 1025).
It however, now seems that the telcos want the CST completely scrapped as the CST together with other taxes, takes 48 per cent of their total revenue.
