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‘Review 25% income tax on RCBs’

The National Association of Rural Banks has called for the downward review of the 25 per cent income tax on Rural and Community Banks (RCBs) to at least 10 per cent.

The Association explained that, the tax which was previously eight per cent had reduced RCBs investments in corporate social responsibility programmes and made it difficult for them to meet the Bank of Ghana (BoG) new minimum capital requirement.

Mr Daniel Ohene Kwaku Owusu, president of the Association said this in Accra yesterday at the launch of the 7th Rural Banking Week Celebrations scheduled for November 16, 2019, in the Western Region.

“Although, we admit that the National Council of the Association has made several representations to the authorities, we have not been successful at getting a concession for a downward review of the 25 per cent income tax on the RCBs,

“We are therefore using this platform to humbly appeal to the listening ears of the government to come to the aid of RCBs,” he said.

The celebrations would highlight some projects being supported by the RCBs in the regions as well as create awareness on the benefits of banking services to the public.

He said out of the 144 active RCBs in the country, 21 were yet to meet the new minimum requirement after the clean-up exercise by the BoG due to the increment in tax.

Mr Owusu said these banks had been given up to next year to satisfy all regulatory requirements, and believed the downward review would help enhance operations of the RCBs.

He said investment in improvement of the systems and process as well as branch network expansion had drastically slowed down due to the increment of the income tax, which was making it difficult for us to acquire new software and machines to perform efficiently.

Mr Owusu said RCBs were key partners in national development and believed the downward review could increase financial services to the unbanked and also speed up government’s financial inclusion agenda.

The Deputy Managing Director of ARB Apex Bank, Mr Alex Kwasi Awuah, disclosed that, the balance sheets of the bank had increased to approximately 6.6 per cent, following the BoG cleanup exercise.

He said another major challenged facing the banking industry were non-payment of loans which BoG must be considerate in dealing with financial institutions.

BY BERNARD BENGHAN                                    

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