CRDB bank Agrees to 18 pc vat on transactions

FOLLOWING the government’s decision to impose 18 per cent Value Added Tax (VAT) on transactions by banks and financial institutions, the CRDB Bank said yesterday that it will swiftly adjust its tariffs to meet operational costs as a result of the new legislation.

The bank’s Managing Director and the Chairman of Tanzania Bankers’ Association (TBA), Dr Charles Kimei, told reporters at the ongoing Dar es Salaam International Trade Fair (DITF) that the bank and other financial institutions were equally 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 noted 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.