CRDB Bank said yesterday that it will swiftly adjust its tariffs to meet operational costs as a result of the new legislation. The bank was speaking in reference to the government’s decision to impose 18 per cent Value Added Tax (VAT) on transactions by banks and financial institutions,
The bank’s Managing Director and the Chairman of Tanzania Bankers’ Association (TBA), Dr Charles Kimei, shared this with reporters at ongoing Dar es Salaam International Trade Fair (DITF) saying that the bank and other financial institutions were concerned with the new law but said they will abide to it by collecting the required tax on behalf of Tanzania Revenue Authority (TRA).
He added that although it was clear that the banks and financial institutions were paying excise duty to the government, the new law imposed new requirements for the banks and the institutions to pay-back the 18 per cent VAT, which is supposed to be borne by customers and not institutions. “Let me make it clear.
If our service charge was at 200/-, we will adjust it to 236/- so that the required 18 per cent is covered,” pointing out that the charges were relatively small to be felt by clients.
He added: “There is a serious exaggeration on the matter. But as players we will abide by the legislation.”
Dr Kimei cautioned that should the institutions stick on not readjusting their tariffs, they will incur additional operating costs. There has been controversy as to who should bear the 18 per cent VAT imposed on banking services after MPs passed the Finance Bill, 2016, last month.
While TRA argues that the tax should be borne by the banks and financial institutions, the Bank of Tanzania (BoT) maintains that customers should carry the burden. Speaking on the ongoing fair, Dr Kimei said the firm had registered more than 520 new customers and 600 mobile banking users.
Meanwhile, the NMB bank has launched its new rotary service, which will see its customers winning up to 3m/- cash prize.
Source: Daily News
