A directive should be given of who should bear the introduced 18% VAT on financial transactions
Dar es salaam, July 5, 2016: Commercial banks remained confused yesterday over who (between them and their customers) should bear the 18% value added tax (VAT) on financial transactions, even as Tanzania Revenue Authority (TRA) sought to put down the uproar. This comes at a time when the Bank of Tanzania (BoT) and TRA have shown clearly they differ on who should shoulder the much talked about 18%.July 5, 2016July 5, 2016
Some banks are dancing to the taxman’s tune which stresses that VAT is to be borne by service providers and not the end users, while the BoT maintains that the burden should be shouldered by the final consumer.
“We are not yet charging our customers; it is like we are implementing TRA directive”, said Mr. Lameck Charles, a marketing officer at Exim Bank. He noted that public needs information on the modalities of the new charges before implementation can take place. This, according to him,would go a long way in clearing doubts amongst bank customers.
Speaking on condition of anonymity, an employee with the DCB Commercial Bank said they started charging their customers on July 1, but this was stopped to await further clarifications. “We are following TRA directive, but still, there is a need for the public to be educated on how the charges will be effected because everyone has interpreted according to their own understanding”, he said.
The Bank of Africa (BOA) started charging the VAT with effect from July 1. The reason was to comply with the amendments of 2014 VAT Tax Act passed at the just-ended parliamentary sitting.
