RCBs renew calls for corporate tax rate to be reduced to at least 15%

The Association of Rural Banks (ARB) has renewed its appeal to the government to reconsider reducing the corporate tax rate for rural and community banks.

The Corporate Tax Rate for the RCBs has been increased from eight per cent to 25 per cent since 2016 – which means a quarter of their profits go to the state, a situation that keeps affecting their operations.

The leadership of the ARB has complained that the hike in the rate has hampered the development role of the RCBs, especially in its corporate social investments and responsibilities, provision of basic infrastructure, financial and material support to individuals and institutions.

“Even though we have been speaking about it since 2016, we are still pleading with the government, the corporate tax from 8 to 25 per cent is too much,” Executive Director for the Association, Comfort Owusu, said.

“We are still appealing to the government to come to our aid by reducing the tax maybe to about 15 per cent,” she said.

National President of the AssociationAssociation, Mr Kwame Owusu Sekyere, said their woes were compounded by the suspension of dividend payment which had stalled the increase in stated capital of some RCBs.

“We are maintaining the appeal to the government to reconsider the downward revision of the corporate tax rate for the RCBs to enable them to live up more visibly to their development responsibilities,” he said.

He said, “We wish to appeal to the Bank of Ghana to allow the provision for the payment of dividend in Act 930 to prevail since internal capital accumulation has been substantial during the suspension period.”

He spoke during the 8th National Rural Banking week celebration of the Association of Rural Banking Ghana held in Ejisu of the Ashanti Region.

It was on the theme, “The Resilience of Rural and Community Banks in the COVID-19 Pandemic Era,”

Head of the Other Banking Supervision at the Bank of Ghana, Yaw Sapong, asked key stakeholders in the rural and community banking industry to use their various strengths to build appropriate synergies for the sector.

“I am referring here to the individual banks, the Association of Rural Banks and the ARB Apex Bank. Leverage your individual and collective strength to advance the industry. In particular, I employ the Association of Rural Banks to hold its members to acceptable ethical and performance standards,” he said.

He said the Bank of Ghana would continue to play its role in enhancing and supporting rural and community banking in Ghana.

Acting Managing Director, ARB Apex Bank, Alex Awuah, said there was the need for greater collaboration at events and other public platforms to reflect the strength of the partnership between all stakeholders.

“As we are all aware, the ‘ARB’ in our name is the short form of Association of Rural Banks, the official advocacy body of the RCBs in the country. We, therefore, view the AssociationAssociation as the first level partner in all our dealings because we know that without the Association of Rural Banks, there would be no ARB Apex Bank PLC,” he said.

He said, “We have therefore resolved to engage more and ensure that our programmes and activities, especially our public engagement and visibility projects are more consultative to help our member banks derive the optimum benefits.”

He observed that this development had enhanced customer reach, employment avenues, technology deployment and has led to improved delivery of financial services within our local communities.

“Our quest to build strong rural and community banks must therefore be footed on sound and effective corporate governance that promotes transparency with stakeholders, ensure ethical behaviours, protection and judicious use of corporate assets and instituting appropriate internal controls and systems,” Mr Sapong said.