Rescind 17.5% VAT On Banking Services

The Industrial and Commercial Workers Union (ICU) Ghana has asked Government to rescind its decision on the re-introduction of the 17 ½ Value Added Tax on core and non-core banking services.

The ICU made this known in a resolution it copied recently to the Minister of Finance in Accra.

According to the union, the law must be abrogated since it was going to cause untold hardship to workers.

Jointly signed by Emmanuel Boateng and Solomon Kotei, Chairman and General Secretary of the Union respectively, the resolution averred that proponents of the law did not make any scientific assessment about the impact of the law on Ghanaians and the economy, adding that should the tax be operational, it would erode the purchasing power of workers who were already paying high income and other indirect taxes.

It also argued that there was nothing like non-core activities in the banking system.

Government has come under intense pressure from various quarters, the latest being unionised workers, to withdraw the 17.5 per cent VAT imposed on what it described as non-core financial services.

Some analysts have noted that the VAT will slow down the already bad financial intermediation in the country while others believe it will pose an additional cost to bank customers.

An executive member of ICU argued that the imposition of the 17.5 per cent on financial services would be tantamount to double taxation, adding that it was illegal.

He said salaries deposited at the banks were a net of all statutory deductions.

By Samuel Boadi

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