ICU Advocates for Reduction in Corporate Tax on Rural Banks

The Industrial and Commercial Workers Union has called on the Bank of Ghana to reduce the 25% corporate tax impacting rural banks, citing its negative effects on operational costs and service delivery. The union also highlighted concerns over locked-up funds in investments and urged government support for the financially distressed Produce Buying Company.

The Industrial and Commercial Workers Union (ICU) has urged the Bank of Ghana to reconsider the 25 percent corporate tax imposed on rural and community banks nationwide. This tax has significantly raised operational costs, ultimately hindering service delivery within these financial institutions. ICU’s General Secretary, Morgan Ayawine, emphasized these concerns during a meeting in Tamale, Northern Region, prior to the upcoming National Quadrennial Delegates Conference set for August.

Mr. Ayawine criticized certain fiscal policies that hinder the growth of rural banks, particularly highlighting the adverse effects of the corporate tax on their sustainability. He stated, “Some of the fiscal policies seem to create and work against the growth and sustainability of the rural and community banks. A classic example… is the imposition of the 25 percent corporate tax on their returns.” He called for a reassessment of this tax to ease its burden on these banks’ operations.

The ICU General Secretary also expressed concerns regarding the significant amount of funds locked in various investments, specifically mentioning the Gold Coast Investment Company. He urged the government to facilitate the release of these funds to enable rural banks to maintain their operations effectively.

Furthermore, Mr. Ayawine appealed to the government to allocate funds for the revitalization of the Produce Buying Company (PBC), a state-owned enterprise facing severe financial distress. He stated, “It is not good for this once vibrant company… to collapse and pass into oblivion.” He stressed the importance of supporting PBC in order to restore its viability and benefits to farmers and workers alike.

The ICU’s appeal to the Bank of Ghana highlights serious concerns regarding the 25 percent corporate tax and its detrimental impact on rural and community banks. This tax, coupled with locked-up funds, severely affects the operational capacity of these banks. Additionally, the call for government intervention to revive the financially distressed Produce Buying Company underscores the need for immediate action to support vital sectors within the economy.

Original Source: 3news.com