The Wa Community Cooperative Credit Union has voiced strong objections to Ghana’s current tax regime, which subjects credit unions to the same 25% tax rate as commercial banks.
During the union’s 56th Annual General Meeting, officials revealed they had allocated 1.1 million Ghana cedis for 2024 tax payments, funds they say come directly from the savings of low-income members.
“Our members include some of society’s most vulnerable groups,” the supervising manager told reporters. “These are not profits from high-yield investments, but hard-earned contributions from teachers, market women, and small-scale farmers.” The manager noted that while credit unions accept their role in national development, the current tax structure fails to account for their nonprofit status and operational limitations.
Unlike commercial banks, credit unions in Ghana are legally prohibited from engaging in foreign exchange trading and other lucrative services. This restriction, combined with the heavy tax burden, has made it increasingly difficult for these institutions to build capital and expand services. “We’re being taxed like banks without having the same revenue opportunities,” the manager explained, proposing either a reduced tax rate of 5-10% or legislative changes to allow credit unions to offer more competitive services.
Despite these financial pressures, the Wa Community Credit Union reported strong performance in 2024, with assets growing to 67.7 million cedis and a pretax surplus of 3.7 million cedis. The union has invested in modernizing its facilities, including banking hall renovations and plans to install its first ATM by May. Members will receive a 20% dividend, though leadership cautioned about rising operational costs and the need to maintain their current 1.52% delinquency rate.
The tax debate comes as Ghana’s government seeks to broaden its revenue base. Credit unions argue their community-focused model deserves different treatment from commercial banks, particularly as they serve populations often excluded from traditional banking. With over 21,000 members, the Wa union’s experience highlights the tension between fiscal policy and financial inclusion goals in developing economies. Similar discussions are occurring across Africa, where policymakers are weighing how best to regulate and tax cooperative financial institutions that serve vital roles in local communities.
