Government has confirmed it will not extend the 17.5% Value Added Tax (VAT) on some fee based financial services to cover mobile electronic payments.
This follows a strong appeal from the Ghana Chamber of Telecommunication to government and other stakeholders about the negative impact the extension of the VAT charges will have on the fast growing mobile payments platform.
All 28 universal banks are currently charging the 17.5% VAT on some financial services.
But the Director of Banking Services at the Bank of Ghana Elly Ohene-Adu, says the mobile electronic payments sector is too young to be taxed.
“The government has graciously agreed not to have any tax levied on mobile money transactions at this time.”
She said in an interview at a stakeholder forum and prize presentation by MTN as part of their mobile money month celebrations.
Meanwhile a tax analyst says government’s attempt to generate revenue through the 17.5% VAT on some fee based financial services would have backfired if it covered mobile electronic payments.
According to Abdallah Ali -Nakyea the move would have discouraged the poor from using the platform that is helping bridge the more than 60% unbanked population in the country.
Ali -Nakyea is confident the move will help sustain the impressive growth of the mobile electronic payments.
Source: citifmonline