GRA discontinues VAT on financial services

The Ghana Revenue Authority (GRA) has discontinued the 17.5% Value Added Tax (VAT) imposed the on financial service in the country.

According to the letter dated April 18, 2017, and signed by the Acting Commissioner General of the Ghana Revenue Authority, Emmanuel Nti, the discontinuation of the VAT charges was to give effect to the law passed by Parliament in Value Added Tax 2017 (Amendment), Act 948

The Letter also stated that move was in line with NPP promising of scraping the levy and giving some relieves to financial institutions.

‘Government in the 2017 budget statement announced some tax cut including abolishing the VAT on financial services.’

The 17.5% Value Added Tax (VAT) on financial services was introduced in 2014 by the erstwhile Mahama administration.

Since its introduction industry watchers have kicked against the move urging government to rather tax directly the income of the financial companies instead of the bank customers.

The Ghana Revenue Authority suspended the implementation of the tax last year after government came under intense pressure from various quarters including banking institutions and some unionized worker groups.