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29.05.2014 Press Release

Mr. Seth Terkper, Stamp Duty Or VAT?

Mr. Seth Terkper, Stamp Duty Or VAT?
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The Ministry of Finance under current Minister is proving to confirm public perception about communication skills lapses of government. The present NDC government can do much better to deal with this perception that it is not up to scratch in terms of efficient planning of government policies, communicating to stake-holders and executing a flawless implementation to avoid any controversy that sometimes gets quite embarrassing.

I have been looking at the tax/duty laws in Ghana and I came to the STAMP DUTY, ACT689 Stamp Duty Act. This is an Act passed in parliament under the NPP government in 2005. Under this Act, the bank transaction/services tax will be more prudently referred to as the STAMP DUTY in accordance with Act689 of Parliament instead of the controversial VAT on bank transactions.

It is shocking that VAT should even be mentioned and associated with bank transactions in my estimation. From classical definition of 'Zero-Rated Goods ', financial services is formally exempted: "Products on which a value-added tax (VAT) is not levied in countries that use a VAT. Examples of goods that may be zero rated include many types of food and beverage, exported goods, donated goods sold by charity shops, equipment for the disabled, prescription medications, water and sewage services, books and other printed publications, children's clothing, and financial services". ...

What the Minister for Finance, Mr. Seth Terkpe, should have planned properly with the Commissioner of IRS and the financial services operators is to implement stamp duties on SOME financial services per the provision of s. 28-29 Act689:

"Act to apply to all stamp duties
28. The provisions of this Act apply to the duties and to the fees which are directed to be collected or received by means of stamps. Moneys received for duty

29. (1) A person who
(a) receives a sum of money in respect of a duty; or

(b) collects a fee by means of a stamp shall pay the monies to the Commissioner.

(2) The Commissioner shall, unless otherwise stated under any other enactment, pay into the Consolidated Fund moneys due to the State under this Act.

In Ireland for instance, "Stamp duty is payable at a rate of €0.50 per cheque on all cheques drawn on accounts held in the Republic of Ireland. In some banks, the duty is payable by the bank when a cheque-book is issued to a customer, and the amount is charged to the customers account. In other banks, the stamp duty is charged when the cheque is presented. Evidence of payment is shown by the harp logo on the face of each cheque.

Where a specially designed cheque is printed for a business, then the bank has an obligation to ensure that the duty is paid before the cheques are issued to the account-holder. Where unused cheques are returned (on closing the account, death of the account-holder, change of name, etc) a refund can be made at the bank of issue.There is Stamp Duty on Credit Cards as well".

Is this problem of planning, strategizing implementation and execution a reflection of part of the major flaws in our education system or runs deeper into our cultural belief system? I think our society lacks the notch to aim for excellence hence we have become accustomed to political leaders showing complete lack of brilliance in performance across board.

YK Amakye Ansah-Yeboah

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