[ 2015-01-31 ]

GRA backtracks on institutions that should charge 17.5 % VAT
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.

Source - MyjoyOnline

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