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General News of Friday, 24 July 2020

Source: www.ghanaweb.com

You introduced CST yet you keep pretending - Minority to govt

The minority in parliament has taken a swipe at government, describing as ‘hypocritical’, their decision to reduce the Communications Service Tax from 9% to 5%.

According to the largest opposition party, NDC, government is burdened with the decision of retweaking the same tax it introduced in 2008 because former president John Dramani Mahama has intended to scrap it if he wins the next elections.

Addressing Parliament on Thursday, Finance Minister, Ken Ofori-Atta, announced the reduction in the cost of the CST due to the coronavirus pandemic.

He said, “In the short term, we will reduce the CST from 9% to 5% to reduce the cost of communication services to the consumer as more and more people work remotely and utilize online services.”

But reacting to the budget statement, the former deputy Finance Minister, Cassiel Ato Forson chastised government for pretending not to be the brain behind the introduction of the CST.

“In fact I heard him talk that they are intending to reduce the Communications Service Tax from 9% to 5%. But the question is who increased it in the first place? It’s the same administration,” Ato Forson told the media

He added that, “Let us be mindful that H.E John Dramani Mahama has said from January 2021 this tax will be abolished. So all they intend doing is to come here and tell us they are trying to abolish it. In fact there is nothing in this document to be proud of.”

Background

The Communications Service Tax was introduced in 2008 at a rate of 6% of the charge for communications service usage. The tax was intended as an excise tax to raise additional revenue from communications services rendered by mobile operators to their customers and to each other when dealing with calls from customers.

The government in 2019 increased the Communication Service Tax to nine percent from the initial six percent.

However, in 2008 when the CST was introduced, the NDC raised opposed the move sighting that it was going to be a burden on poor consumers. However, the NDC’s under former president Mahama failed to abolish the tax during his 4-year tenure. In 2013, the NDC dropped it plans to double the tax following concerns from the opposing party NPP.

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