- March 19, 2021
- Posted by: Ato
- Category: Finance
The Ghana Association of Bankers wants government to find other ways of addressing the high fiscal deficit, rather than targeting the banking sector with new tax introduction.
“As an industry, we believe that if we [the banking industry] have this huge fiscal deficit, we must have a plan to address it.”
“We believe we have differences in opinion as to how to approach the cleanup. The fiscal gap, the approach that the policy makers are currently pursuing which we believe can potentially be exclusive and counterproductive,” CEO of Ghana Association of Bankers, John Awuah.
According to Mr. Awuah, this is the time for the banking industry to assist in economic recovery, and therefore such unnecessary tax would prevent the sector from fully supporting the post covid-19 economic recovery programme.
“Yes, we believe the fiscal gap must be addressed but we do not subscribe to an industry such as the banking sector which is basically at this time needed the most to help with the national recovery process, should be the target for additional layers of taxes,” Mr. Awuah stated.
BoG revoked licenses of 9 banks whilst six merged into 3 banks
The Bank of Ghana revoked the class 1 banking licenses of nine banks during the financial sector clean up.
They included UT Bank, Capital Bank, Sovereign Bank, Beige Bank, Premium Bank, The Royal Bank, Heritage Bank, Construction Bank and UniBank.
Six Banks were merged into three banks. They were First Atlantic Merchant Bank Limited and Energy Commercial Bank, OmniBank Ghana Limited and Bank Sahel Sahara Ghana as well as First National Bank and GHL Bank Limited.
Due to this, some costs were accumulated due to the injection of capital to settle depositors of the collapsed banks, whilst a new bank – Consolidated Bank – was created which required capital to run the bank.
The cost of the financial clean-up which is in excess of GHc20 billion is what compelled government to introduce the financial sector levy to accrue some revenue to offset the debt.