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Business News Wed, 24 Mar 2021

No consultation with banks before imposition of 5% levy – Awuah

The Chief Executive Officer of the Ghana Bankers Association, John Awuah has disclosed that no consultation whatsoever was made with the banks before the government imposed the 5% Levy.

“We are not going to war with them at the end of the day we must sit at the table and dialogue” he stated on the 3FM Sunrise Morning Show.

According to him, the banks are looking for burden-sharing, he however said he cannot speak for individual banks but obviously, somebody will have to pay for that new levy.

His comment is in sharp contrast with an earlier comment made by the Managing Director of the Agricultural Development Bank, Dr. John Kofi Mensah, who said that reforms introduced by the regulator in the past few years have strengthened the banking sector; hence, the industry can absorb the 5 percent levy recently introduced by government.

Government in the 2021 budget introduced a new 5 percent financial sector clean-up levy with the view to using it to defray outstanding commitments in the sector. The levy is projected to run until 2024.

Mr. Awuah said in the past before taxes are introduced the banks were consulted, citing the Finance Minister Ken Ofori Attah as a good example of that healthy relationship.

“There is no justification for the imposition. It worries us that we don’t know what is coming next. It has implications for investments,” he noted.

He also said the banks would lose a minimum of GH¢300 million annually in additional taxes. “So now the banks will be limited by about GH¢2.2 billion more loans that they could have given out to potential loan applicants.”
Source: 3news.com