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Business News of Thursday, 20 February 2014

Source: Bloomberg

Banks to charge VAT on non-lending services

Ghana’s banks will begin charging Value-Added Tax (VAT) on some services, excluding loans by the end of next month, Ghana Association of Bankers Chief Executive Officer (CEO) Daniel Mensah has said.

The Ministry of Finance, Bank of Ghana (BoG) and the country’s revenue agency are talking to banks and will identify the services to add the VAT by the middle of March, Mensah said in an interview in Accra, the capital, today. The levy will not be placed on lending, he said.

The VAT on bank services will be 15 percent, he said. “It’s going to make the cost of people getting financial services more expensive,” he said.

“The areas they initially outlined for the tax to apply was virtually everything, that’s why we’re meeting with them to clarify and to agree".

Ghanaian Finance Minister Seth Terkper raised the VAT on goods and services to 15 percent last year from 12.5 percent to boost revenue after falling gold and cocoa prices and rising government wages led the government to miss its budget deficit target.

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