Business News of Friday, 30 January 2015
Insurance companies, finance houses and managers of pension funds have temporarily been excluded from charging the 17.5 percent tax on their services.
According to a new notice issued by the Ghana Revenue Authority (GRA), the tax will be extended to them in due course.
The 17.5% VAT on fee-based financial services in accordance with the Value Added Tax Act, Act 870, which was deferred last year commenced with effect from January 5, 2015.
Even though the Ghana Association of Bankers has started charging their customers, GRA said “in due course, the implementation will be extended to non-banking providers of fee-based financial services”.
Ghana Revenue Authority appears to have backtracked on its insistence that all fee-based financial institutions charge the 17.5 tax on their financial services.
The Commissioner General of the Ghana Revenue Authority, George Blankson had told Joy Business that the 17.5% tax will affect any sector that provides services at a cost to its consumers.
He explained: “If a shirt is taxable, the law doesn’t say shirts worn by journalists are taxable and shirts worn by whatever are not taxable. The law normally targets the product and the product in this case is the fee-based financial services. So whoever provides a fee-based financial service comes under obligation to charge the tax.”
But the latest notice from the GRA has exempted the non-banking financial services.