GRA directs telcos to start charging revised Communication Service Tax

The Ghana Revenue Authority (GRA) has directed the Telecom Operators to start charging their customers the revised Communication Service Tax.

The directive JoyBusiness understands was contained in a letter to the telcos on September 4 2019.

This was after the levy together with taxes outlined in the Supplementary Budget, secured President Akufo Addo’s signature last month.

For now, the implementation would not affect Radio and TV as well as other stakeholders in the broadcasting industry.


Finance Minister Ken Ofori Atta in the Supplementary Budget announced an increase in the Communication Service Tax from 6 to 9 per cent.

According to the finance minister, the increase was to help develop the foundation for a viable technology ecosystem in the county.

This will comprise putting in systems to identify and combat cybercrime, protect users of information technology and combat money laundering and other financial crimes.

Mr Ofori-Atta maintains that sharing ratio would be done in a way that National Youth Employment programs would continue to receive the same portions as the current cycle.

In 2018 the tax was first introduced at an Ad Valorem Rate of 6 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 GH¢304 million accrued in 2017.

The amount generated from the levy was 4.56 per cent more than the projected GH¢401.8 million in the 2018 mid-year budget.

Based on information JoyBusiness picked up from the Ghana Revenue Authority, TV and Radio stations are now not charging the tax but they would later be directed to do so after the necessary engagement with all industry players.

According to the finance minister, the decision to bring onboard TV and Radio stations was to correct the policy gap and ensure equity in the communication industry.

When would the telcos start charging the tax?

Based on engagement with some of the telcos it is not clear for now on the exact time that they would start charging the tax.

This is despite the fact that the Ghana Revenue Authority would affect their collections from the date that the said communication was made to them to start charging the tax.

Some of them have told JoyBusiness the implementation has taken some time despite the directive because “It takes a lot to change telcos pricing…it is not that straightforward, this is why when taxes are introduced, government need to give enough notice of effective date so systems can be changed to support it,” the source close to one of the telcos said.

How would the application of this levy affect consumers?

There has not been any official communication from any of the telcos or the Telecoms Chamber, however, based on some private discussion with some of the players this is how some of the telcos may apply the levy; so for instance, if you buy 1 cedi credit, you will get a message that your CST is 0.09 pesewas and actual credit is say 0. 91 pesewas.

Another scenario on the expected impact on consumers  

There are just projections; this is because every operator has its open pricing mechanism, “complexity of pricing & competition”.

But if you take a package of 100 of data, voice and SMS with all margins & cost added & then you work the tax.

CST was¢6 then and it is¢9 now

Levy was ¢5 then and it is¢5 now

Subtotal ¢11 then and it is¢14 now

Vat figure is GH¢¢111 then and it is¢114 now.

Apply VAT of 12.5% get ¢124.87 and it is¢128.25 now.

Impact on TELCOS

The telecom operators are worried about the impact of these taxes on their operations arguing that these levies represent a significant part of its earnings. They have also argued that they are being overtaxed.

Based on data from the Supplementary Budget, by the end of this year, the Communication Service Tax should bring in about GH¢524 million, representing a little over GH¢100 million increase.