Home Business Gov’t Extends Free Utilities For Consumers …As Mid-Year Budget Reduces CST, GH¢2Bn Guarantee Scheme For Businesses

Gov’t Extends Free Utilities For Consumers …As Mid-Year Budget Reduces CST, GH¢2Bn Guarantee Scheme For Businesses

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Government has extended free water and electricity for consumers among other goodies, the Finance Minister, Ken Ofori-Atta announced in Parliament yesterday.

Presenting the 2020 Mid-Year Budget Review, Mr. Ken Ofori-Atta said it was part of government’s plans to cushion Ghanaians in this era of Covid-19 pandemic, saying 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.

“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.

He said: “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.

The Finance Minister also announced to Parliament that President Akufo-Addo has reduced the Communication Service Tax (CST) by 4 percentage points- from 9% to 5%.

According to Mr. Ofori-Atta, “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. We hope we can count on the Telcos to also match this reduction in the CST by reducing their tariffs” he said.

The 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. In 2019, it was increased from 6% to 9% to enable government get a fiscal space to create a viable technology ecosystem to among other things identify and combat cybercrime in the country.

However, government has taken steps to reduce it from 9% to 6%.

The Finance Minister mentioned that in line with the government digitization agenda, reducing the CST to 5% would help reduce the cost of communication services to consumers and to further speed up the digitalization effort where every citizen, nationwide, has access to the internet and other digital services.

However, in order to enable businesses to thrive well, government has established a Guarantee Scheme of up to GH¢2 billion to grant opportunities for them to borrow from banks at a more affordable rates and at longer tenor.

The Minister noted that the establishment of the GH¢2 billion Guarantee Scheme is to help businesses to access loans from banks at affordable rates in order to retain jobs and to save businesses who have been impacted negatively by the coronavirus pandemic.

“It takes a caring government to establish 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” he said.

Additionally, Mr. Ofori-Atta disclosed that government has taken steps to further cushion businesses amidst the coronavirus pandemic by increasing the Coronavirus Alleviation Programme Business Support Scheme (CAPBuSS) by GHȼ100 billion.

According to him, the increment of the CAPBuSS for businesses will make funds available to businesses and help them operates smoothly despite the adverse effects of the pandemic.

“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 GHȼ50million for the creative arts industry and the media,” he added.

 

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