GST on fee-based financial services regarding commissions for mobile money comes into effect resulting from part implementation of the provisions of the Finance Act 2023. .
GST on fee-based financial services, which includes fees and commissions charged by banks, was part of the original GST Act 2009. However, the Finance Act 2021 made these supplies exempt. Banks had already implemented the GST charge a few months ago. It is important to note that GST will only be charged on the fee or commission charged by banks and mobile companies and not on the entire transaction amount.
According to a tweet by MARTIN.E.MICHAEL LLB BL, a lawyer, notary public, and chairman of Radio Mercury, the new Goods and Services Tax (GST) on mobile money fees has come into effect in Sierra Leone as of today. He made this tweet after doing a transaction using orange money. The GST has been implemented in response to the recently introduced Finance Act of 2023 1.
The GST will be levied on all financial services provided by leading mobile money providers in Sierra Leone, Orange and Africell 1. The GST will be included in all charges and fees, including transfer fees 1.
For those wondering how new GST on mobile money fees will work. It has come into effect today. Here are two pictures. First one was for transfer of 1,000 done few days ago. Fee for transfer was NLE 2.5 with zero tax. The second is a transfer of 1,000. Fee is still 2.5 but notice… pic.twitter.com/aZDtCAa1nh
— MARTIN.E.MICHAEL LLB BL (@MEMLAW1) October 15, 2023
To illustrate how the new GST will work, MARTIN.E.MICHAEL LLB BL, a customer shared two pictures on Twitter. The first picture shows a transfer of 1,000 with a fee of NLE 2.5 and zero tax 1. The second picture shows a transfer of 1,000 with a fee of NLE 2.5 and a tax of 38 cents 1. The tax is equivalent to 15% of the transfer fee 1. Therefore, the total amount charged for transferring 1,000 is now NLE 2.88, which is 38 cents more than before 1. It’s important to note that different amounts will have different fees and taxes 1.
MARTIN.E.MICHAEL Confirms GST on Mobile Money Fees Comes into Effect in Sierra Leone Today after doing transaction