Telcoms Chamber commends government on reduction of communication service tax

Kenneth Ashigbey, Chief Executive Officer of the Ghana Chamber of Telecommunications, has commended government on the implementation of the reduced Communication Service Tax, CST, to improve performance.

Speaking in an interview, he iterated that businesses are positioned to take advantage on the tax reduction to become more efficient.

“Now all of us are moving digital and all of that, the cost of doing business as far as connectivity is concerned will come down and the fact that government has reduced the tax burden on all of us as consumers is something that is good and we are only hoping that the people will use it to be able to turn their businesses around and then it will help in the recovery process for all of us.

“You know how hard COVID has hit all businesses, now that that cost component in terms of the connectivity will be lower we hope that businesses will use it to turn round their wheels of productivity so that we can be able to recover from the effects of the pandemic”.

Government in its Mid-year budget review announced a reduction in the tax from 9% to 5% as part of measures to cushion consumers from the economic impact of the COVID-19 pandemic.

The tax reduction which is expected to take effect on the 15th of September, will see consumers enjoying a reduction in the cost of calls and data.

 Earlier on August 8, 2020 the Chamber refuted claims by government that telecommunication companies under-declared taxes due government.

In a press statement signed by its CEO Dr Kenneth Ashigbey, he said, telcos operating in the country “namely AirtelTigo, MTN and Vodafone are good corporate citizens, showcasing an exemplary record of tax compliance as well as delivering on all their tax obligations.”

It said the content of the answer by the Communication Minister, Ursula Owusu-Ekuful given on the Common Platform (CP) in Parliament on Friday is almost similar to the earlier press conference held on the 14th of November 2019.

The Minister stated among other things that “the introduction of the CP has uncovered that, prior to the introduction of the CP, ¢470 million in taxes was lost from potential under-declarations between 2015 to the first quarter of 2017.

“An estimated amount of ¢300 million in taxes was saved between Q1 of 2017 to date as a result of the announcement of the implementation of the CP on March 8th, 2017 and its actual implementation date”.

The Chamber reiterated that these claims although potential and estimated have not been brought to the attention of its members and on the contrary, the ongoing working relationship between the Ghana Revenue Authority (GRA), National Communications Authority (NCA) and/or their technical partner KelniGVG regarding the Common Platform does not support these allegations.

Mr. Ashigbey said the mobile industry is deeply concerned about the continuous recurrence of these claims, and the fact that standard audit principles and practice that characterize its members’ dealings with regulators continue to be breached.

“Any revenue assurance best practice will expect that such findings if indeed were the case will be shared with our members for their response and reconciliation before onward engagement with external parties and the media”.