President Nana Addo Dankwa Akufo-Addo has once again demonstrated that he listens to the plight of Ghanaians as he has extended free water and electricity for a period of three months.
He has also increased the Coronavirus Alleviation Programme Business Support Scheme (CAPBuSS) by GHȼ150million to support businesses and reduced the Communication Service Tax (CST) from 9 percent to 5 percent.
This was disclosed by the Minister for Finance, Ken Ofori-Atta when he presented the 2020 mid-year budget review and supplementary estimates in Parliament on Thursday, July 23, 2020.
Mr. Ofori-Atta mentioned that it is the responsibility of a caring government to recognize the adverse effects of the coronavirus on its people and that is why government has taken the necessary steps to further absorb the cost of electricity and water for the next three months, increase the CAPBuss support for businesses by GHȼ150million and reduce the CST from 9 percent to 5 percent.
Free electricity and water for all
President Akufo-Addo in April this year announced the reduction of electricity tariffs by half and provision of portable water for free to all Ghanaians for the months of April, May and June to make up for lost income as a result of the virus.
This absorption, according to the Finance Minister has been extended for another three months to make sure the ordinary Ghanaian continues to enjoy free electricity and water while government works to eliminate the virus.
“Mr. Speaker, the reason is simple. It is because we put the concerns and aspirations of the ordinary Ghanaian first. That is also why we further reduced electricity prices by half and completely provided potable water for free for everybody since March this year. And we will extend it for another 3 months. To break it down, it takes a caring government of the people, and with that, I mean, a Government of all the people, to offer cost-free water to all across the country: representing all domestic and commercial customers in Ghana for three months.
“It takes a caring government to be for the people and for business, large and small, to choose to subsidize electricity consumption by 50 per cent to 4 million (4,086,286) households and nearly 700,000 (686,522) businesses at a cost of GH¢1.02 billion in three months. And we will extend the coverage for lifeline customers for another 3 months” he said.
Increase in CAPBuSS for Business
Mr. Ofori-Atta also announced that government has taken steps to further cushion businesses amidst the coronavirus pandemic by increasing the Coronavirus Alleviation Programme Business Support Scheme (CAPBuSS) by GHȼ150million.
“It takes a caring government to hear the distress of business and respond with support to small and medium businesses to the tune of GHȼ600 million in order to help them survive and thrive in these uncertain times. The CAPBuSS will be increased by GHȼ150million to help many more MSMEs, including GHȼ50 million for the creative arts industry and the media.”
In addition, the Finance Minister said government has established a Guarantee Scheme of up to GH¢2 billion to enable businesses to borrow from banks at more affordable rates and at longer tenor to save their business and retain jobs.
Reduction in Communication Service Tax (CST)
Mr. Ofori-Atta also announced in the mid-year budget review that government will reduce by 4 percent the Communication Service Tax (CST) from 9 percent to 5 percent to reduce the cost of communication services on consumers.
According to the Minister “in the short term, we will reduce the CST from 9 percent to 5 percent to reduce the cost of communication services to the consumer as more and more people work remotely and utilize online services. We hope we can count on the Telcos to also match this reduction in the CST by reducing their tariffs”.
The Communication Service Tax (CST) was introduced in 2008 at an ad valorem rate of six percent. The tax is levied on charges payable by consumers for the use of communication services.