The Industrial and Commercial Workers Union (ICU) has voiced strong opposition to the 25% corporate tax imposed on rural and community banks.
The Union argues that the policy stifles growth and threatens the sustainability of rural and community banks. ICU is, therefore, demanding that the Bank of Ghana and relevant authorities urgently reconsider the tax burden to ensure the continued viability of these critical financial institutions.
Speaking on the issue at Tamale ahead of the Union’s National Quadrennial Delegates Conference, the General Secretary Morgan Ayawine lamented that some fiscal policies appear to undermine the very institutions they should be supporting. One of such policy he mentioned is the 25% corporate tax, which he says is a major impediment to the growth and development of rural and community banks despite the crucial role they play in Ghana’s financial ecosystem by providing essential banking services to underserved communities.
“Some of the fiscal policies seem to create and work against the growth and sustainability of the rural and community banks. A classic example of such fiscal policy that militates against their ability to continue to effectively operate is the imposition of the 25 percent corporate tax on their returns, which undoubtedly affects their growth, development, and sustainability,” he indicated.
They are, therefore, calling for a review of the tax to enable rural and community banks to grow and expand to push the local economies.
He said, “We therefore call on the Bank of Ghana to take a second look at the 25 percent corporate tax and reduce it so as to minimize its impact on the operations of the rural and community banks,” Ayawine stated.
Rural and community banks serve as the financial backbone of local economies, facilitating access to credit for small businesses, farmers, and individuals who might otherwise be excluded from mainstream banking services.
By imposing such a significant tax burden on these banks, the ICU argues that the government is effectively choking their ability to reinvest profits, expand services, and contribute meaningfully to rural economic development.
The ICU’s demand for a revision of the corporate tax aligns with concerns raised by financial analysts and rural banking stakeholders who argue that a lower tax rate would enable these institutions to thrive.
The call for a reduction is not merely about profit margins but about ensuring that rural banks can continue playing their role in financial inclusion and economic empowerment.
