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Withdraw 50% Communication Service Tax – NDC

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The opposition National Democratic Congress (NDC) is urging the Akufo-Addo led government to withdraw the 50 per cent increase in the Communication Service Tax (CST).

Similarly, the NDC also wants the government to look into the trade-off of none expiry of data and other tariffs affecting the very lives of the Ghanaian populace.

According to the NDC, the increase in the CST by the current government from the six to nine per cent had brought untold hardship on the Ghanaian telecom users and businesses.

CST

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

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

The Finance Minister in justifying the increment had said it was aimed at creating a viable technology ecosystem to among other things identify and combat cybercrime.

Moment of Truth

Addressing a press conference at the NDC’s Moment of Truth Session in Accra on Thursday, December 12, 2019, the Member of Parliament for Ningo Prampram Constituency, Mr Sam George, said the increase in CST was as a result of the insensitivity of the Akufo-Addo led government to the plight of the Ghanaian people.

He said in the month of October this year alone, the government had increased the tariffs on water, fuel and electricity aside the increase in the CST.

That, he said, President Akufo-Addo had failed to fulfil his promise of reducing taxation and tariffs to make life more comfortable for the ordinary Ghanaian.

“The President has broken his moral and social contract with Ghanaians and has eroded trust and confidence in his ability to lead Ghana,” Mr George said.

He added “this increase points to two things—first, a lack of policy coherence on the part of the government as it claims to be driving technology inclusivity and yet appears to be slapping inhibitive tax hikes on the same technology.”

According to him, the increase in the CST was only benefiting the telecommunication companies and government, with the citizenry suffering the resultant effects.

“The only one losing out here is the ordinary Ghanaian. The telcos do not care about us and so also does our government,” he said.

He added “the telcos are interested solely in their bottom lines and profit margins for their shareholders and, sadly, the Akufo-Addo government which Ghanaians elected is interested in how much more tax it can take out of our meagre earnings.”

Mr George explained that although the rationale for the CST, according to the Minister of Communications, Mrs Ursula Owusu-Ekuful, was to set up a Cyber Security Authority, the 2020 budget was silent on the said Cyber Security Authority.

“We demand that, until legislation for the Cyber Security Authority is put before Parliament and passed, any revenue collection in its name must cease,” he said, pointing out that “in any case, why must the Cyber Security Authority be funded solely by the taxpayer and not with contributions from private entities such as banks who are also facing challenges with cyber-attacks?”

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