The Ghana Revenue Authority (GRA) has released the list of services that would attract the 17.5 percent Value Added Tax (VAT) and National Health Insurance Levy (NHIL).
The GRA in a letter to Bankers and Banks said the 32 fee-based services would attract the tax from July 1, 2014.
The amendment of the VAT law last November expanded the scope of the tax and raised the rate from 15 percent (including the National Health Insurance Levy) to 17.5 percent.
Financial services, which hitherto had been exempted from VAT, have now been brought under the tax — placing Ghana among a very short list of countries in the world that charge VAT on financial services.
According to the amended law, “financial services” means provision of insurance; issue, transfer, receipt of, or dealing with money — whether in domestic or foreign currency –or any note or order of payment of money; provision of credit; or operation of a bank account or an account of a similar institution.
The list of fees, commissions and similar charges for financial services that are subject to the tax was developed by the Technical Committee for the Implementation of VAT Act 2013 (Act 870) which was made up of representatives of the Ghana Bankers Association of Bankers, the Ministry of Finance and the Ghana Revenue Authority and approved by the Minister of Finance, Seth Terkper.
Find below the full list of financial services that would attract the 17.5% tax:
1. CURRENT ACCOUNTS (Foreign/Local) – CORPORATE BODIES ONLY
2. BANK DRAFT (PAYMENT ORDER)
3. STOPPED CHEQUES
4. RETURNED CHEQUES
5. COMMISSION ON TURNOVER (CORPORATE BODIES ONLY)
6. OVERDRAFT PROCESSING OR RENEWAL FEE
7. REVOLVING ACCEPTANCE CREDIT
8. ARRANGEMENT FEE FOR FACILITIES
9. STATEMENTS AND CERTIFICATES OF BALANCE
10. CLEARING CHARGES
11. CHEQUES FOR COLLECTION
12. STANDING ORDERS
13. TELEPHONE BANKING
14. SAFE CUSTODY
15. CHEQUE BOOKS
– Sale of cheque leaflet
– Replacement of Lost Cheque Book
16. DEBIT CARDS AND CREDIT CARDS
17. REVOLVING CREDITS
18. COLLATERAL MANAGEMENT
19. TRANSFER OF DOCUMENTS TO OTHER BANKS
20. GUARANTEES/BONDS/TENDER/PERFORMANCE
21. REQUEST FOR FOREX DRAFTS
22. OUTWARDS TRANSFER: SWIFT/TELEX
– Drafts/Money Orders – Customer
23. TRAVELLERS CHEQUES, DRAFTS
24. CHEQUE LODGEMENTS – (FOR CORPORATE BODIES AND THIRD PARTIES ONLY)
25. EVACUATION FEE (CASH-IN-TRANSIT)
26. UNPAID STANDING ORDER
27. CLOSURE OF ACCOUNTS
28. REMOTE BANKING SERVICES
– Online Banking (Internet)
– E-statements
– E-clients
– Phone banking
– SMS banking
– Mobile Banking
– Monthly subscription
– Financial Transaction Fee
29. LENDING FEES
– Commitment Fee (Arrangement fee, Processing fee, facility fee)
– Processing Fee
– Property Valuation Fee (Open market value)
– Guarantee Commission
– Bid Security
– Bank Credit Letter (Letter of Intent)
– Mobilization Guarantee
– Retention Guarantee
– Performance Bond
– Default or restructured
30. OTHER LOANS, EXCLUDING SALARY ADVANCE
– Arrangement Fees
– New Loans
– Top-Ups
– Early Settlement Fees
31. LETTERS OF CREDIT (IMPORTS)
Establishment Commission
– Arrangement Fee
* Presentation under L/C Drawings Amendments:
– Increase in Amount
– Extention of period
– Extention of period – another quarter
– Discrepancy Other amendments:
32. DOCUMENTARY BILLS FOR COLLECTION (IMPORTS)
Handling charges – customers Negotiation Commission
– Advice of fate
– Bills deleted
– Protest Payment Commission
– Holding charges (per quarter)
Prior Approval – Customers with:
– Own Resources
– Telex/Cable charges
– Swap charge
Customers allocated funds from Bank;
ExchangeTelex / Cable charges
By: Evans Effah/citifmonline.com/Ghana
