UNICOF Warns Against VAT On Banking Services

The Union of Commerce Industry & Finance Workers has warned that any attempt by government to introduce the 17.5 percent VAT on some banking services would not be countenanced at all.

According to General Secretary of the Union, John Esiape, they issued the warning because the Ghana Revenue Authority (GRA) was still running commercials to educate the public on the tax.

Because services like ATM and SMS would be affected, if customers decide not to use them, the banking halls would be choked, he said.

�That also means management would have to increase the number of employees and you can know the ripple effects would be disastrous�most of the services they are talking about they can have serious repercussions on the banking public.�

John Esiape said about 30 of the population avail themselves to banking services, noting that the introduction of the 17.5 VAT would affect banks� bid to increase the percentage.

Government in June suspended the introduction of the 17.5 percent tax on some services after public outcry.

Some Ghanaians have threatened to withdraw their savings from commercial banks if Government goes ahead to institute the measure this month other than finding other means of mobilizing resources for its operations.

Among the list of services that were billed to attract the 17.5 percent VAT were current accounts (foreign/local) for corporate bodies only, bank draft (payment order), stopped cheques, returned cheques, commission on turnover (corporate bodies only), overdraft processing or renewal fee, revolving acceptance credit, arrangement fee for facilities, statements and certificates of balance, clearing charges, cheques for collection, standing orders and telephone banking.

Others were debit cards and credit cards, revolving credits, collateral management, transfer of documents to other banks, guarantees/bonds/tender/ performance, request for forex drafts and outwards transfer: swift/telex.

Source: Daily Guide