The Communications Service Tax (CST) is one levied on charges for the use of communications services that are provided by electronic communications service providers. CST is imposed under Section 1 of the
Communications Service Tax Act 2008, (Act 754), CST(Amendment) Act, 2013 (Act 864) and CST(Amendment) Act, 2020 (Act 1025). It is paid by consumers to the communications service providers, who in turn pay all CST collected to the Domestic Tax Revenue Division of the Ghana Revenue Authority on a monthly basis. The GRA is required under the law, to pay the CST collected into the Consolidated Fund.
CST is charged at a rate of 5%.
Act 1025, specifically reduced the rate of the tax from 9% to 5%. This was announced by the President as an additional measure to alleviate the hardships caused by the pandemic.
The rate took effect from 15th September, 2020.
CST is charged only by electronic communications service providers who are in the provision of electronic communications classified by the National Communications Authority under the provisions of the National Communications Regulations 2003 (LI 1719) and notified in writing by the Commissioner-General of the GRA to charge the tax.
These businesses include:
An electronic communications service provider is required to levy CST on all charges for usage of communications services provided, in accordance with the provisions of the Communications Service Tax Act 2008 (Act 754). It is unlawful for any individual to charge the CST.
At least 20% of the Revenue generated from the CST will be used by the government to finance the National Youth Employment Programme (NYEP) in particular and support the national development agenda of the country in general.
It must be noted that the introduction of the CST coincided with the removal of import duty, VAT and National Health Insurance Levy (NHIL) on the importation and sale of telephone sets including mobile or cellular phones and satellite phones. This has the effect of reducing the cost of telephone sets and generally mitigating the tax burden that may result from the introduction of the CST.
An electronic communication service provider is required to account for CST on the face-value of prepaid recharge cards sold within the accounting period. The consumer thus pays the tax at the time of purchase of prepaid recharge cards.
A Free Zone Enterprise which provides electronic communication services is required to charge CST on all communication services provided to consumers within the domestic economy and account for the tax to the Commissioner-General of the GRA. All such Free Zone Enterprises are required to submit monthly CST returns in accordance with the provisions of the Communication Service Act 2008, (Act 754).
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