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Calls for Corporate Tax Relief to Strengthen Rural Banking in Ghana. The ARB Apex Bank has called on the Bank of Ghana to consider reducing the corporate tax rate for Rural and Community Banks (RCBs) from the current 25% to a maximum of 15%.
Dr. Anthony Kwesi Aubynn, Chairman of the Board of Directors of the Bank, made this appeal during the Bank’s 22nd annual general meeting, highlighting the potential benefits of such a reduction for financial inclusion in Ghana’s rural areas.
Dr. Aubynn argued that lowering the tax burden on RCBs would enable these institutions to better fulfill their core mission of promoting financial inclusion in rural communities.
He emphasized that the rural banking sector has mirrored the broader banking industry’s growth, with RCBs achieving an impressive 122.4% increase in profit before tax, rising from GH¢164.0 million in December 2022 to GH¢364.8 million by the end of 2023.
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Calls for Corporate Tax Relief to Strengthen Rural Banking in Ghana: Financial Growth Amidst Challenges
The Bank’s performance in 2023, despite macroeconomic uncertainties and the impact of the Domestic Debt Exchange Programme (DDEP), was marked by significant growth.
Total assets grew by 20.4%, from GH¢1.03 billion in 2022 to GH¢1.24 billion in 2023, driven primarily by a substantial increase in deposits, which surged by 19.6%, from GH¢1.01 billion to GH¢1.22 billion over the same period.
Additionally, deposits across the rural banking sector rose by 31.1%, from GH¢7.4 billion in December 2022 to GH¢9.7 billion in December 2023.
Loans and advances also experienced a robust growth of 26.9%, increasing from GH¢2.6 billion to GH¢3.3 billion year-on-year.
Call for Strategic Tax Reduction
Dr. Aubynn highlighted that despite the Bank’s resilience in the face of economic challenges, a reduction in corporate tax rates would alleviate financial pressures on RCBs.
He noted that the sector’s performance, including a 17.9% increase in investments from GH¢432.4 million in 2022 to GH¢510.1 million in 2023, demonstrates the potential for even greater impact if tax burdens were reduced.
The ARB Apex Bank’s call for a lower corporate tax rate aims to support the continued growth and stability of RCBs, which play a crucial role in fostering financial inclusion and economic development in Ghana’s rural areas.
By easing the tax load on these institutions, the Bank hopes to further strengthen their ability to serve as vital financial lifelines for rural communities.
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