List Of Taxable Financial Services Released

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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).

A letter issued last week and signed by GRA’s Commissioner-General, George Blankson to Bankers and Banks said that, 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 initially 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 GRA 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;

Exchange Telex / Cable charges

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