Ministry of Communications orders telcos to stop passing on 9% service tax to subscribers

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The Communications Ministry, has ordered Mobile Network Operators (MNOs) to stop passing on the 9percent Communication Service Tax (CST) to subscribers.

In a letter addressed to the National Communications Authority (NCA), and published in full below, the Communications Ministry stated that the CST should be treated the same way VAT, NHIL, GETFUND levy and all other taxes and levies imposed on entities doing business in Ghana are treated.

“At a series of meetings held between the Ministry of Communications, Mobile Network Organisations (MNOs) and the NCA on 7th and 8th October, 2019, we were informed that prior to 4th September 2019, MNOs had not been passing on CST to subscribers but had decided to take advantage of the 3% increase to pass on the entire tax to subscribers. This has effectively increased their profit margin at the expense of subscribers,” the letter explained.

MTN, AirtelTigo, Vodafone and Glo, have been charging their customers the full amount of the revised Communication Service Tax (CST) since October 1, 2019.

The CST, which has been increased from 6 percent to 9 percent, has been applied to any recharge purchase by subscribers.

For every GH¢1 of recharge purchased, a 9 percent CST fee is charged the subscriber leaving ¢0.93 for the purchase of products and services.

According to the Ministry of Communications statement, which has been copied to all the telcos, this is wrong.

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