Parliament to Banks: Stop charging customers for your sales tax

JUBA, South Sudan (Eye Radio) – The Parliamentary Standing Specialized Committee on Finance and Economic Planning has ordered commercial banks to stop illegally deducting sales tax and excise duties from customer accounts.

The directive follows a public outcry and a formal admission by the banking association that some financial institutions have been non-compliant with the law.

The Standing Specialized Committee summoned all commercial bank managing directors in Juba after receiving complaints from citizens.

The committee’s chairperson, Michael Ayuen Johnson, stated that banks were violating the Financial Act by passing on an 18% sales tax burden directly to their clients, rather than shouldering the cost themselves.

“If a bank charges a 1% withdrawal fee, the bank is required to pay 18% of that 1% to the Revenue Authority,” Johnson explained.

“It is the bank’s responsibility to shoulder this cost. But the public reported to us that some banks were deducting this 18% directly from their clients.”

During the meeting, Bruno Sirisio, the Chairperson of the Bank Association, admitted that some banks had breached the committee’s directives.

He claimed the confusion stemmed from an unclear communication from the National Revenue Authority regarding how the tax should be computed.

Sirisio said the banks now have a “clear understanding” and would implement a new methodology that causes “less harm to the public.”

In response, the committee has requested all commercial banks to submit written reports detailing how they handle sales tax.

Johnson affirmed that while they are not “hanging” the banks, they will work with the National Revenue Authority and the Central Bank to ensure full compliance with the law.