Mobile Network Operators (MNOs) have agreed to stop the upfront deduction of the 9% Communication Service Tax (CST).

The decision by the MNOs was made on Wednesday after a crunch meeting with the Communications Ministry.

The Communications Ministry directed the mobile telecommunication companies to stop deducting the tax upfront, stressing that it was making the government unpopular.

The Minister, Ursula Owusu-Ekuful, said the upfront deductions seemed to her like a deliberate attempt by the telcos to make the government look bad.

In a statement issued on Wednesday, the Ghana Chamber of Telecommunications said the tax will now be applied through tariff adjustment.

Read full statement below:

MOBILE INDUSTRY ALIGNS WITH GOVERNMENT ON COMMUNICATIONS SERVICE TAX (CSINCREASE IMPLEMENTATION.

The Ghana Chamber of Telecommunications wishes to inform mobile subscribers and the general public that, following fruitful discussions between government and industry; an agreement to stop upfront deduction of CST but rather apply the tax through a tariff adjustment has been reached.

For the past few weeks, there have been several discussions on the implementation of the CST. The members of the Ghana Chamber of Telecommunications will like to reassure its customers that we have acted in good faith considering our intentions to engage all relevant agencies following the passage of the CST Amendment Law. The mobile industry considers the upfront deductions legal and implemented the current CST based on alignment with how the Ghana Revenue Authority (GRA) calculates and charges the CST.

However, we understand stakeholders’ concerns and have aligned on the current agreement to implement a price increase to pass on the tax instead of upfront deductions. It is worth noting, that despite this arrangement to stop upfront deductions, GRA will still calculate and account for the CST as an upfront charge.

The price increase will take effect by November 26th 2019, as the industry requires a number of weeks to complete the reconfiguration of our systems to accommodate the commercial and technical requirement that the exercise necessitates to ensure an even smooth experience for customers. We acknowledge the Ministry of Communications, Ministry of Finance, the National Communications Authority (NCA) and GRA for their support and understanding in this matter.

We wish to thank our customers, for their patience and continued patronage of our services over the past several weeks following the CST amendment implementation. During the transition period from upfront payments to the pass-through payment of the CST through a tariff increase, our members have resolved to give extra value to reward customers for their loyalty. Subsequently mobile operators will notify their customers individually in the ensuing days.