Banks about to be hit with an extra 5% in corporate taxes – Bright Simons

The Vice President of IMANI Africa, Bright Simons, has disclosed a list of banks and institutions that will be charged with an extra 5% in corporate taxes.

The institutions included banks, non-financial institutions, insurance companies, and telecommunications companies liable to collect and pay the Communications Service Tax under the Communications Service Tax Act, 2008 (Act 754), Breweries, Bulk Oil Distributors, and electronic money issuers among others.

He stated that this will not be an easy phase for banks as they will be made to suffer an increased measure of the brunt of the government’s ongoing debt restructuring debt programme.

In a tweet on February 20, 2023, he said: “It's the Season of Sorrow for Ghana's banks. Fresh out of an episode where they were made to bear double their share of the burden of Ghana's ongoing debt restructuring, they are about to be hit with an extra 5% in corporate taxes. They're yet to join calls for fiscal discipline.”

Meanwhile, the Minority leader in parliament, Dr Cassiel Ato Forson, has hinted that some banks are at risk as a result of the domestic debt restructuring being embarked on by the government.

Ato Forson noted that this is according to a report by the Bank of Ghana.

After the government announced its decision to exchange domestic debts, questions were raised about the viability of banks and how they were going to survive, since most banks were engaged in government business.

However, after the initial resistance, the Ghana Bankers Association and the Insurers association reached an agreement with the government on the terms of the programme.

According to Cassiel Ato Forson, the debt exchange programme has shown that the government is looking to transfer its bankruptcy to the private sector.

Speaking on the floor of parliament on February 16, 2023, Ato Forson asked the finance minister to be cautious about how he is embarking on the debt exchange programme.

“The financial sector, don’t be surprised that by the time they are done and dusted, we will have to engage in banking sector cleanup again.

"Because our banks are going to obviously collapse. I have cited the Bank of Ghana report that says that 17 banks are at risk because of what is happening. I urge the finance minister to be careful in what he is doing not to transfer the bankruptcy to the private sector,” he said.

It's the Season of Sorrow for Ghana's banks. Fresh out of an episode where they were made to bear double their share of the burden of Ghana's ongoing debt restructuring, they are about to be hit with an extra 5% in corporate taxes. They're yet to join calls for fiscal discipline pic.twitter.com/uIxNN1Ekcm

— Bright Simons (@BBSimons) February 20, 2023