Sectors & markets

Financial institutions to stop charging VAT on financial services

The Ghana Revenue Authority (GRA) has issued a directive to all financial institutions, to cease with immediate effect, the Value Added Tax (VAT) charged on all financial service transactions in the country.

In a letter signed by the Ghana Revenue Authority (GRA), the Commissioner General of the GRA, Emmanuel Kofi Nti said that the directive given was in compliance with the Value Added Tax (Amendment), Act 2017, Act 948 passed by Parliament, to include the supply of the financial services as exempt supply.

The repealing of the 17.5% VAT/NHIL charged on financial services follows the government announcing the implementation of some tax reliefs with the aim of providing a friendly environment for businesses in the country.

The government, through due process, is also working at ceasing other existing taxes, some of which have been seen to take effect and others that will be implemented in months to come. Some of these include the reduction of the special petroleum tax rate reduced from 17.5% to 15%, the abolishing of duty on the importation of spare parts, the abolishing the 5% VAT/NHIL on real estate sales, the abolishing of the 1% Special Import Levy, 5%t VAT/NHIL on domestic airline tickets, and initiating steps to remove import duties on raw materials and machinery for production within the context of the ECOWAS Common External Tariff (CET) Protocol.