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Business News of Wednesday, 31 December 2014

Source: Myjoyonline.com

Tax on fee-based financial services re-introduced

Government has re-introduced taxes on selected financial services provided by banks in the country, still set at 17.5%.

This follows the implementation of the new VAT on fee-based financial services on December 29, 2014.

According to a letter sighted by Joy Business and copied to all banks in the country, the institutions are required to charge the tax from last Monday.

The tax which was introduced earlier this year was put on hold because of some concerns by players in the financial sector.

However Finance Minister, Seth Terkper, in the 2015 Budget announced the tax would be brought back by January 2015.

Some analyst have argued that the introduction of the tax will affect savings and insurance penetration in the country,

Below is a list of items that would attract the tax:

CURRENT ACCOUNTS (Foreign/Local) - CORPORATE BODIES ONLY

1. Current Accounts (Foreign /Local)

2. BANK DRAFT (PAYMENT ORDER)

3. STOPPED CHEQUES

4. RETURNED CHEQUES

5. COMMISSION ON TURNOVER

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

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