The Ghana Revenue Authority (GRA) has instructed the Telecom Operators in Ghana to begin charging their customers the revised Communication Service Tax.
The directive from GRA for the telcos to implement the new Communication Service Tax also know as Talk tax was contained in a letter to all telcos on September 4 2019.
The revised Comminication tax came was announced after the levy together with taxes outlined in the Supplementary Budget, was accentedd to by the President Akufo Addo’s in August.
According to letter from the GRA, the implementation would not affect Radio and TV as well as other stakeholders in the broadcasting industry.
Background on increment of talk tax
The government of Ghana in July announced an increment in the communication service tax from 6% to 9%. This is in a quest to create a viable technology ecosystem in the country
Presenting the budget review and supplementary budget for the last half of the year 2019, Minister of Finance Ken Ofori Atta announced an increment. The Communication Service Tax, also referred to as talk tax, was introduced into the Country’s tax regime by the former administration of President Kufuor to support the financing of technology projects in the country.
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How the latest talk tax will affect consumers
The latest increment implies that consumers have to pay more for the same service they have enjoyed for over a decade now. Consumers usually pay the tax on such services. Therefore the increment would be translated into cost to consumers. As this tax also affects Fintechs and their usage of telecommunication services, consumers of digital financial services should be ready to pay more.
The CST widens the tax bracket to cover the informal and rural sector through mobile phone usage. It therefore seems to be an effective way to improve coverage. However, the formal sector who already pay taxes through payroll, withholding tax among others will feel more of the heat.