By: Fred Yaw Sarpong
Some commercial banks in the country have started sending text messages to their respective customers, alerting them the new 17.5% value added tax (VAT) to be charge against them.
Among these banks are Stanbic Bank and Barclays. The text message read: ‘Dear value customer, with the coming into force of the new VAT Act 870, banks are required to charge a 17.5% VAT on all services rendered for a fee, effective May 2014. Visit your nearest branch for further details.’
Some of the bank already charge their customers between GHc5 and GHc30 per a month on current accounts, depending on the bank.
From May 1, 2014, customers who pay GHc5 on current account per a month will be paying GHc5.875, GHc10 will now be GHc11.75 while GHc15 will now be GHc17.625.
However, the Ministry of Finance has denied reports indicating that commercial banks are to charge Value Added Tax (VAT) on salaries and savings accounts.
A statement signed by the Deputy Minister of Finance, Cassiel Ato Forson, he stated categorically that salaries, savings, deposits, loans and payment with cheques are all exempted from VAT.
According to the ministry, the new VAT Act, Act 870 only affects fees that are charged on non-core financial services such as data processing, legal, accounting, actuarial, notary and consulting services.
‘We also wish to state that this is not a new law, it has been in place since 1998. Banks were charging fees on services they were rendering. Banks are also already paying the VAT on inputs used to render these services,’ he added.
Hon. Forson stated that the Act 870 requires the Banks to register for VAT and they can offset the VAT against the VAT they charge. Therefore, the impact of the VAT is not the full 17.5% as being speculated.
‘VAT registered businesses/persons can also offset the VAT (input VAT) they pay to the banks against their VAT (output VAT),’ he added.
Daily Express gathered that the this enforcement of the tax obligation should have started from January 2nd 2014, but the banks were allowed till May to enable them to fully prepare to implement the new policy.