The Chief Executive Officer of the Ghana Association of Bankers says the 5% taxes imposed on banks’ gross profit will make it difficult for the banking sector to compete effectively on international markets following the commencement of the African Continental Free Trade Agreement.
Speaking to JoyNews’ Samson Lardy Anyenini on ‘Newsfile’, he cautioned that the implementation of the 5% tax would make Ghana’s banking sector the most taxed in the sub-region; with the potential to drive away investors.
“We are gradually putting banks in Ghana on top of the industries that are heavily taxed. And if you were a private investor looking for opportunities in the sub-region, will you provide liquidity to the banks in Ghana which will have an effective tax rate in excess of 35% or you will look at Cote D’Ivoire which has an effective tax rate of 25% or Nigeria which will be around 30%. So it also hampers our competitiveness on the international market,” he said.
His statement follows the Association’s appeal to the government to reverse a tax proposal that will exact 5% of banks’ gross profit into the public purse to help defray the cost incurred by the state during the clean up of the banking sector.
Despite this, Mr Awuah stated that Banks in the country were not against government mobilizing revenue to help with developmental efforts and the country’s quest to achieve greatness, but the ‘seeming attempt” aimed at targeting the banking industry is what they are trying to address as an Association.
“We believe it’s not only misplaced but could potentially be counter productive,” he stressed.
The C.E.O emphasized that he finds it worrying to witness the action the government has taken against the banking sector because they, as an institution are equally struggling.
Explaining this, he said without any compulsion whatsoever, Banks came together to set up a GH¢10 million Covid-19 relief fund to help the country in the procurement of PPEs and other mrfical items.
“We donated to the Noguchi center, we donated to doctors in residency. If you go to all the public universities, district hospitals, you will see something that Banks have done just by looking around. Talk about the infectious disease center, the Banking Industry contributed GH¢ 2 million towards its construction,” he stressed.
According to him, taking into consideration the great lengths banks in the country have gone to ensure that the country sails smoothly through the economic hardship occasioned by the novel coronavirus pandemic, a 5% levy on banks’ gross profit was not the reward the banking sector deserved.
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