Adnan Adams Mohammed
The Association of Ghana Industries (AGI) is pushing the government to reconsider reviewing some tax policies which is impacting negatively on the operations of Ghanaian industries and factories.
Some of the tax policies they want reviewed are the 5% VAT rate introduced during the last mid-year budget review, a downward review of the benchmark values of certain goods that are manufactured locally, and also spell out clearly the modalities involved in utilizing the environmental tax in fighting the plastic menace in the country.
This plea comes ahead of the 2019 mid-year budget review which has been delayed against the normal schedule. Several Ghanaians and businesses are upbeat against adverse tax policies considering the current economic situations with high cost of living and doing business in the country.
“We had concerns about the 2019 budget and have noted these concerns to the ministry and our expectation is that some of them will be addressed in this year’s review”, Chief Executive Officer of AGI, Seth Twum-Akwaboah has said in an interview.
“One of them is the benchmark values. A reduction in the benchmark values which we think is not good for manufacturers because it is not making us competitive and we expect something to be done about it. Additionally, since last year, there has been the issue of 5% flat VAT which is affecting businesses because it is now being absorbed as tax instead of an input tax that you can claim.
“Then there is another aspect which is the tax-on-tax which is about 18.5% and companies are complaining about it and we expect that it will be looked at. Others relate to plastics; what we call the environmental tax, which the producers of plastics are paying. We don’t see how it is being utilized to deal with the plastics menace and yet there is so much talk about banning plastics and all that; we want to see if there could be changes to it”, Mr Twum-Akwaboah noted.
AGI members want the 5% flat VAT to be reduced to a rate of 1% so that consumers will not have to bear any extra cost and it also do not see why reduce the benchmark values for the foreign products to be sold cheaply compared to local products, so that is what the members are asking the government to look at.
The business community also wants to see more funds being made available to support local industries, especially as the African Continental Free Trade Agreement (AfCFTA) is coming into force.
These are the broader strategy expectations of the AGI to support local producers to become competitive in order to take advantage of the free Africa market.
