Rural banks in Ghana appeal to government to reduce the 25% income tax requirement, here’s why

The Association of Rural Banks (ARB) has called on the government of Ghana to reduce the 25 per cent Corporate Income Tax imposed on Rural and Community Banks (RCBs) in the country.

Rural banks in Ghana appeal to the government to reduce the 25% income tax requirement, here’s why

According to the association, the move will enable the banks to expand their operations in the country.

The President of the ARB, Mr Daniel Kwame Owusu said this while speaking at the launch of the 7th Rural Banking Week celebration in Accra on Tuesday, October 29, 2019.

He indicated that a downward review of the tax would allow for the banks to increase their financial services to the unbanked and the underserved parts of the country, and help speed up the government’s inclusion agenda.

Mr Owusu added that already, the National Council of the association had made several appeals to the authorities but had not been successful at getting a concession for a review of the increment.

The corporate income tax went up from eight to 25 per cent in 2016 as contained in the fiscal policy of the government at the time, and the ARB says the increment has slowed down its members’ investment in Corporate Social Responsibility (CSR) programmes.

Also, their investment in the improvement of their systems and processes, as well as branch network expansion have drastically slowed down.

So far, 26 out of the144 RCBs had still not been able to meet the requirements due to the 25 per cent tax increment.

The President of the association, hence, appealed to the government and the Bank of Ghana (BoG) to endeavour to bring on board the association in deliberations on regulatory and policy interventions which directly affected the rural banking sector.

Noting that: “It is crucial to engage and involve us because the lack of consultations, we believe, create policy implementation challenges.”

He, however, commended the BoG for the bold step it took to sanitise the financial system, indicating that, that had helped bring back the needed investor confidence.

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