Consider reducing corporate tax of rural banks to 15% – Government told

• Rural banks are calling for a reduction of the corporate tax

• The corporate tax for rural banks is currently at 25%

• Alex Awuah is therefore calling for the tax to be reduced to 15%

Alex Kwesi Awuah, Managing Director of ARB Apex Bank, has called for a reduction in the corporate tax of rural banks operating in the country.

According to him, government must consider reducing the corporate tax from 25 percent to 15 percent.

In an interaction with Joy Business News at the Annual National Managers’ Conference of Rural Banks, Alex Awuah said the current tax placed is depriving many rural banks from providing lending support to smaller businesses in rural areas.

“The call for government to consider to reduce the tax from 25% to 15%, it’s been something we’ve been advocating for years now. In fact, as we all know, the corporate tax was 8% sometime back because rural banks were still looked at as agents of development in rural communities until I think the year 2015 or 2016, it was increased to 25%,” Awuah pointed.

“Since then, we’ve been advocating that the government considers reducing it to 15%. And it is important in the sense that when you look at the work of the rural and community banks, they play a major role in terms of development. You go to these areas and they do lots of corporate social responsibility programmes – they spend a lot on education,” he added.

The Managing Director further called on government to provide support to assist rural banks to retrieve some locked-up funds of depositors of defunct institutions as a result of the banking sector clean-up.

“We’ve been advocating that government helps us get the monies [locked-up] back. The impact…It had a significant impact on our operations and as we’re also development agents, we think if our corporate tax rate is reduced, it will help us build some capital and improve our reserve position and also make our banks stronger.”