GRA cautions Banks to discontinue charging 17.5% VAT
All financial institutions have been charged to discontinue charging VAT on financial services. This is in line with the implementation of the policy on VAT on financial services.
You would recall that during the 2017 budged reading, the Finance Minister, Ken Ofori Atta announced certain tax cuts which included 17.5% VAT on financial services.
In this regard, a letter dated 18th April, signed by the Acting Commissioner General of the Ghana Revenue Authority, Emmanuel Kofi Nti to the Executive Secretary of the Association of Bankers, charged them to discontinue charging VAT on financial services.
The letter which was copied to the Finance Minister, his deputies and other management members at the ministry, said Parliament gave legal backing to the policy when it passed the Value Added Tax (Amendment) Act, 2017, Act 948; hence all bankers are expected to adhere to the directive.
Government in the 2017 budget statement announced some tax reliefs including abolishing VAT on financial services. To give legal effect to the policy on VAT on financial services, “Parliament passed the Value Added Tax (Amendment) Act, 2017, Act 948 to include the supply of financial services as exempt supply”.
In line with the above, we hereby inform all financial institutions to discontinue charging VAT on financial services.
Suraya Alidu Malititi | kapital971.com