British Financial Economist and Lecturer at the Aston University in Birmingham, Dr. Sajid Mukhtar Chaudhry, has described banks in Ghana as too profitable, hence the need for the imposition of a ‘Bank Tax’ to generate more revenue for the government.
According to him, the ‘Bank Tax’ will provide the country with a sustained source of revenue and act as catalyst for banks to reduce reliance on short-term funding.
Speaking to Joy Business, Dr. Chaudhry, proposed a tax of 2% of total liabilities net of equity and insured deposits for the long term or 10% of profit before tax.
“It is not normal for having banks to be that profitable. It is surprising banks in Ghana are too profitable and earn much more than other industries”.
“This tax when introduced will aid Ghana in its revenue mobilisation measures’. I propose a 2% tax of total liabilities net of equity”, he said.
Dr.Mukhtar Chaudhry furthered that Ghana would have to be swift in introducing this tax and learn from the experiences of other countries to address its large budget deficit.
“Many countries have introduced a ‘bank tax’ and the last country to do so is Australia which did the introduction in May 2017 and this has helped the country. So there is the need for that”.
The banking sector recorded ¢4.4 billion in profit before tax in the first-half of 2022, data from the Bank of Ghana has revealed.
This was after it had suffered a loss of ¢6.6 billion in 2022 due to the impact of the Domestic Debt Exchange Programme on their operations.
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