Business News of Tuesday, 6 January 2015
The Ghana Revenue Authority (GRA) has dispelled fears that the necessary education has not been carried out for both the public and banks on recently reintroduced VAT on fee-based financial services.
The tax regulator insists everything has been done for smooth implementation of the 17.5 percent tax on selected bank transactions.
Acting Deputy Commissioner of Communications and Corporate Affairs at GRA, Kwesi Oppong-Damoah, says the relevant stakeholders were adequately engaged prior to the reintroduction of the tax to avert any confusion.
The tax which took effect from last Monday was put on hold last year over confusion regarding which services should attract the fee.
“From the time that it was suspended to this time, we believe we have done enough education. But education will still be ongoing. Even when we start we’ll still have to continue with education, it’s not going to be stopped”, said Mr Oppong-Damoah.
The 17.5% VAT on fee-based financial services will be charged on only banking transactions in the interim — this is what Joy Business has picked up from persons close to the enforcers.
The sources say the plan to re-introduce the tax is in phases.
This means other sectors like the microfinance, capital and bonds industry and other financial sectors would be required to charge the tax subsequently.
Hence other fee-based financial services like investments and insurance are also exempted from charging the tax in the interim.
Explaining why only banks would be charging the tax for now, Mr Oppong-Damoah revealed that it will help to manage problems that may arise in its implementation.
The tax, which was re-introduced on December 29, 2014 is part of government’s efforts to improve revenue mobilisation to fund some of the country’s capital expenditure for this year.