News Guide Africa

Tag: Ghana Union of Traders Association (GUTA)

The cost of survival: Navigating Ghana’s complex business landscape

By Adnan Adams Mohammed; Finance and Economic Journalist

In the boardrooms of Accra and the bustling markets of Kumasi, a singular conversation dominates: the survival of the Ghanaian enterprise.

In the wake of official macroeconomic indicators pointing toward a burgeoning recovery, the ground-level reality for many businesses remains a grueling tug-of-war between stabilizing data and stifling operational costs.

From the exodus of local manufacturers to the struggle for capital among women entrepreneurs, Ghana’s business environment is at a critical crossroads.

The “exodus” of local production

The Ghana Union of Traders Association (GUTA) has sounded one of the loudest alarms. According to Joseph Paddy, Vice President of GUTA, the high cost of doing business is no longer just a balance sheet issue; it is a threat to national sovereignty in production.

“Ghana remains one of the most expensive operating environments in the sub-region,” Paddy noted during a recent Joy Business Roundtable. The disparity is startling: while production costs in Ghana can consume 30% to 35% of revenue, neighboring Ivory Coast sees figures as low as 3% to 7%.

The result is a worrying trend of “de-industrialization.” Paddy warned, “Traders often find it cheaper to import goods than to source them locally, even after paying duties.” He cited instances of local manufacturers shutting down machines to become importers simply to stay afloat, a move that inevitably leads to job losses.

Structural bottlenecks vs. macro gains

The disconnect between “headline” success and “street” reality is perhaps best explained by Mark Badu-Aboagye, CEO of the Ghana National Chamber of Commerce and Industry (GNCCI). While the government celebrates falling inflation recorded recently at 3.2% Badu-Aboagye argues that structural bottlenecks are blunting these gains.

“The transmission mechanism takes some time, moving from the macro to the micro,” he explained. “Now you’ve done the macro, it is about time you do the micro.”

A major point of contention is the “mismatch” between inflation and interest rates. With inflation at 3.2% but the reference rate hovering around 10%, businesses are still paying a premium for credit. “I see a mismatch in there… I want to see a very closer relationship between the inflation and the lending rate,” Badu-Aboagye stated, emphasizing that high production costs fueled by energy and transport keep prices elevated for consumers despite the central bank’s tight monetary policy.

The capital gap: Women in business

In Kumasi, the conversation shifts to equity and access. At the 3rd Women in Business Dialogue, stakeholders highlighted that while women represent 46% of Ghana’s entrepreneurial workforce, they remain the most underserved by formal financial structures.

Dr. Gordon Acquaye, CEO of Business and Financial Times (B&FT), argued that funding alone isn’t the silver bullet. “Women need to be given that tool and structure from the onset… we are able to help them with bookkeeping, then the next level will be to scale up,” he noted. The upcoming Women’s Development Bank is seen as a beacon of hope, but as Regina Ofori of Ecobank emphasized, formalization remains the key: “Women can do a lot to support their businesses like registering their companies.”

A glimmer of hope: Tax reforms and stability

Despite the hurdles, there are signs of a policy pivot. Mary Kwarteng Darko, an Associate Director at PwC Ghana, suggests the tax regime is shifting from “aggressive” to “business-friendly.” The abolition of the Emissions Levy, E-Levy, and the COVID-19 Health Recovery Levy has provided immediate psychological and financial relief.

“Overall sentiment is that the country is taking a more balanced approach to taxation,” Darko observed. However, she cautioned that the extension of the Growth and Sustainability Levy to 2028 creates “mixed sentiments” for long-term planning.

From the government’s perspective, the recovery is well underway. Frederick Amissah, Technical Advisor to the Finance Minister, maintains that stability is breeding confidence. “Businesses are becoming a lot more confident. This shows the macro stability we have now is working,” he asserted.

The path forward

The consensus among industry players is clear: stability is a prerequisite, but it is not a destination. For the “Ghanaian Dream” of a self-reliant, industrial economy to survive, the government must move beyond managing the currency to managing the cost of a kilowatt of power and the interest on a small business loan.

As Joseph Paddy aptly put it: “Every business grows on policy. One good policy can help a business grow.” The question remains whether those policies will arrive fast enough to keep the lights on in Ghana’s remaining factories.

May 16, 2026
GRA cites lower costs for traders amid price hike concerns linked to ‘New VAT Regime’

GRA Boss, Anthony Sarpong, tour businesses to explain new VAT Regime

By Adnan Adams Mohammed

The Ghana Revenue Authority (GRA) has moved to clear the air regarding the new Value Added Tax (VAT) regime under the Value Added Tax Act, 2025 (Act 1151), following concerns raised by the Abossey Okai Spare Parts Traders Association.

The Authority maintains that the transition from the 4% Flat Rate to a 20% Standard Rate will actually lower consumer prices and reduce the cost of doing business when applied correctly.

In a press statement released February 10, 2026, the GRA addressed claims that the new 20% rate would burden traders and consumers. According to the Authority, the previous Flat Rate system included a 21.9% non-deductible input VAT, which traders had to absorb into their costs.

Under the new 2025 regime:

Full Deductibility: The 20% input VAT is now fully deductible, allowing traders to claim it back from the GRA.

Lower Final Prices: In a comparative illustration of a GH¢500 item, the GRA showed that the final price to the customer drops from GH¢760.66 under the old system to GH¢720.00 under the new regime—a savings of GH¢40.66.

Removal of “Tax-on-Tax”: The new system eliminates “cascading taxes” where levies were previously charged on top of other levies.

The GRA attributed current price increases to a “transitional pricing error,” where traders are applying the new 20% output VAT without removing the now-deductible input VAT from their cost calculations.

Market Fairness and the New Threshold

The GRA also defended the decision to increase the VAT registration threshold to GH¢750,000. While some feared this would distort market competition, the Authority provided data showing that both registered and non-registered traders can achieve the same final customer price (GH¢720 for a GH¢500 item).

The increased threshold is intended to provide administrative relief to smaller traders, freeing them from the burden of VAT filing without giving them an unfair pricing advantage.

Key Benefits to Businesses

The Authority highlighted several structural improvements designed to streamline trade:

Abolition of the COVID-19 Levy: The 1% COVID-19 Health Recovery Levy has been permanently removed.

Unified Structure: The removal of the flat rate scheme creates a single, transparent system for all registered taxpayers.

Effective Rate Reduction: The overall effective tax rate has decreased from 21.9% to 20%, representing a 1.9% saving on every transaction.

Support for Traders

To assist with the transition, the GRA has established a joint technical team with the Ghana Union of Traders’ Associations (GUTA). This team provides guidance on record-keeping, input tax claims, and correct pricing strategies.

The GRA has extended an invitation to the Abossey Okai Spare Parts Traders Association to engage in similar constructive support to ensure their members can take full advantage of the new policy.

February 11, 2026
GRA and GUTA Joint Press Release on Implementation of VAT Act, 2025 (Act 1151)

The Ghana Revenue Authority (GRA) and the Ghana Union of Traders’ Association (GUTA) held a joint meeting on Wednesday, 7th January 2026, to discuss the implementation of the Value Added Tax Act, 2025 (Act 1151).

The meeting aimed to deliberate on the impact of the new legislation on traders, particularly GUTA members who previously operated under the VAT Flat Rate Scheme.

Key agreements reached include:

1. All taxpayers, including GUTA members, must charge and account for VAT at 20% (comprising VAT, NHIL, and GETFund Levy) by the end of the first quarter of implementation, as per the law. This allows GUTA to provide feedback to GRA on concerns raised.

2. A joint technical team of GUTA and GRA will address sector-specific challenges, including VAT record-keeping, input VAT claims, and VAT calculation, making recommendations for further review.

3. Nationwide education and sensitization programs will guide traders through the transition to ensure compliance with the new VAT regime.

GRA reassured traders6 of its support for a smooth transition, while GUTA encouraged members to comply with the new law, prioritizing traders’, consumers’, and national developmentH interests.

The joint release was issued by the Ghana Revenue Authority (GRA) and Ghana Union of Traders’ Associations (GUTA).

January 8, 2026
Reformed VAT Bill passed as COVID-19 Levy and others abolished

Ghana’s Parliament has passed the Value Added Tax (VAT) Bill, 2025, marking a significant overhaul of the country’s VAT regime.

The new law replaces the existing flat-rate system with a unified structure, aiming to simplify the tax framework and improve clarity, consistency, and legal certainty.

However, some stakeholders, like the Ghana Union of Traders Associations (GUTA), have raised concerns about potential unfair competition and market distortions.

“The reforms will make compliance easier, not harder, and will not introduce new tax burdens on businesses or consumers”, Deputy Finance Minister, Thomas Nyarko Ampem, said while dismissing these concerns.

The reforms fulfil a major pledge announced by the government in the 2025 Budget and Mid-Year Fiscal Policy Review to make Ghana’s VAT system fairer, simpler, and more growth-focused.

The Finance Minister, Dr Cassiel Ato Forson, who led the policy revisions, said the new legislation will remove distortions, reduce cascading effects, promote compliance, and improve economic efficiency for businesses and households.

“We promised to abolish the COVID-19 levy. With the support of this House, I am happy to announce today that it is abolished,” Dr Forson declared on the floor of Parliament.

Under the new VAT structure, the COVID-19 levy is removed entirely and is expected to return GH¢3.7 billion to individuals and businesses in 2026 alone.

The bill also abolishes the decoupling of the Ghana Education Trust Fund (GETFund) and the National Health Insurance Levy (NHIL) from the VAT base, meaning both are now eligible for input tax deductions, a change projected to reduce the cost of doing business by about 5 per cent.

The government says that cumulatively, the full reform package will give back nearly GH¢6 billion to the Ghanaian economy.

Other approved measures under the VAT Bill include:

• Abolition of VAT on mineral reconnaissance and prospecting, aimed at reviving exploration investment and reversing years of stagnation in greenfield development.

• Reduction of the effective VAT rate from 21.9 per cent to 20 per cent.

• Increase in the VAT registration threshold from GH¢200,000 to GH¢750,000, relieving thousands of micro and small enterprises from mandatory VAT compliance.

• Extension of zero-rated VAT on locally manufactured textiles to December 2028, protecting more than 2,000 jobs and enhancing competitiveness in the domestic garment market.

According to the Finance Minister, the previous taxation threshold had eroded significantly in real value since 2015, forcing many micro-businesses into VAT registration and raising administrative costs.

The new threshold, he said, restores fairness and frees small enterprises to grow without heavy compliance burdens.

Dr Forson emphasised that the VAT overhaul goes beyond tax adjustments, positioning Ghana for a digitally enhanced revenue future.

The rollout will introduce Fiscal Electronic Devices (FEDs) to track taxable transactions, digital VAT collection on cross-border e-commerce, and a new VAT reward scheme encouraging consumers to demand receipts and help police compliance.

The government believes these interventions will boost investor confidence, support local industry, and stimulate job creation, particularly in mining and textiles, where policy distortions have long restricted growth.

“These reforms mark a turning point in Ghana’s value-added tax administration,” the Finance Minister said. “This is not just a tax reform, it is a step toward a more just, predictable, and business-friendly economy.”

The Ghana Revenue Authority has begun a nationwide sensitisation campaign ahead of implementation, ensuring businesses and consumers are fully prepared for the transition.

The passage of the VAT Bill, 2025, signals a decisive shift in Ghana’s tax policy, one aimed at easing the cost of doing business, empowering industry, and anchoring long-term fiscal stability.

Demands for broader dialogue on new VAT reforms

Meanwhile, the Africa Centre for Tax Policy Research (ACTOR) is calling for a structured dialogue between the Ghana Union of Traders Associations (GUTA), the Ministry of Finance, and the Ghana Revenue Authority (GRA) over the government’s new VAT reforms and the planned rollout of Artificial Intelligence (AI) systems at the ports.

GUTA has raised concerns that the new VAT threshold of GH¢750,000, which requires businesses exceeding it to pay 20% VAT, could create unfair competition, splitting the market between traders who charge VAT and those who do not.

Reacting to the call in a statement issued on 24th November, 2025, the policy think tank, ACTOR, said the threshold is not ‘a sudden hike but a return to the long-standing real value of VAT entry points when Ghana’s volatile exchange rate is considered.’

The think tank explained that VAT thresholds exist in Ghana and globally to protect small businesses and allow tax authorities to focus on medium and large taxpayers who generate the most revenue.

ACTOR noted that the dollar value of the threshold has remained stable over the years, with the proposed GH¢750,000 roughly equivalent to USD 62,500 within historical ranges. Their analysis also showed the real price difference between VAT-registered and non-registered traders is about 1.5%.

The think tank also disagreed with GUTA’s suggestion that all traders should be allowed to opt into the Modified Tax System (MTS), saying thresholds cannot be optional without risking system collapse. The MTS, ACTOR stressed, is meant only for micro and small businesses below the VAT threshold.

While defending the reform, ACTOR acknowledged traders’ concerns and urged the GRA to strengthen monitoring and turnover verification to prevent VAT evasion.

The group concluded that strong collaboration among stakeholders is key to a smooth rollout, minimising market distortions and building trust in the tax system.

By Adnan Adams Mohammed

December 1, 2025
VAT Reforms: traders clash with gov’t over unfair system

Ghana’s Value Added Tax (VAT) reforms have sparked intense debate, with the Ghana Union of Traders’ Associations (GUTA) warning of devastating consequences for small and medium enterprises (SMEs).

But the government and Deloitte see it as a welcome move to ease tax burdens and stimulate investment. The sudden shift from a 4% flat rate to a 20% VAT has raised concerns about market distortion, with GUTA arguing that it will create an uneven playing field for traders.

The new threshold of GH¢750,000 is expected to segregate traders, with those above the threshold charging 20% VAT and those below charging nothing. This, GUTA warns, will lead to higher prices for consumers and loss of business for affected traders. The Union is calling for a modified tax system that ensures parity and promotes compliance. In a statement issued last week, GUTA’s First Deputy Secretary General, Richard Amamoo, said the Union is observing “with grave concern” the challenges that will emerge from the new regime.

“Two traders dealing in the same products in the same market will now be treated differently,” Amamoo explained. “One will charge 20% VAT because their turnover crosses the threshold, while the other, with lower turnover, will charge nothing.”

GUTA fears that customers will simply go to the trader without VAT, leaving the other at a huge disadvantage. The Union is calling for a modified tax system that ensures parity, promoting compliance and reducing the risk of non-compliance fueled by pressure and imbalance.

He said GUTA “acknowledges and welcomes measures aimed at enhancing tax compliance and improving revenue collection,” but stressed that the reforms come with serious unintended consequences.

On the other hand, Deloitte believes the VAT reforms will reduce the effective VAT rate, easing the tax burden on businesses and stimulating investment. The government aims to simplify VAT administration, strengthen compliance, reduce the tax burden on businesses, and support job creation.

The professional services firm, in its analysis of the 2026 National Budget stated that it will closely monitor the implementation of the 24-Hour Economy initiative and the Accelerated Export Development Programme, which collectively aim to unlock productivity, expand export capacity, and drive inclusive growth.

“For the business community and consumers, the proposed reform to the Value Added Tax (VAT) regime is welcome news. Implementation of the reforms is expected to reduce the effective VAT rate to 20% from 21.9%. These reforms are expected to ease the tax burden on businesses, stimulate investment, and support job creation”.

The Minister for Finance, Dr. Cassiel Ato Forson, who presented the 2026 Budget Statement and Economic Policy of the Government of Ghana for the next financial year to Parliament, outlined the government’s agenda to transition from stabilisation to transformation.

Key policy measures announced include further strengthening of domestic revenue mobilisation, continued rationalisation of public expenditure, and a renewed commitment to fiscal discipline.

The Ghana Revenue Authority (GRA) is pushing for a January 1, 2026, rollout, pending parliamentary approval. With technical and operational mechanisms in place, the GRA is confident in a smooth transition.

Commissioner-General Anthony Sarpong, speaking at the PwC Post-Budget Forum in Accra, said the Authority is “fully prepared” to roll out the changes at the beginning of the new year”. indicating that, early approval is crucial to ensuring a smooth transition into the new system, which aims to simplify VAT administration, strengthen compliance, and reduce the tax burden on businesses.

He explained that Parliament has already commenced deliberations on the VAT Amendment Bill, and the GRA is hopeful that lawmakers will give the green light before Christmas.

“We are expecting Parliamentary approval before Christmas, and once that is secured, we are ready for January 1 [2026],” he said.

He added that the GRA has been engaging the Ministry of Finance and other stakeholders to ensure that the full set of reforms, ranging from adjustments to the VAT structure to enhanced digital invoicing systems, can be implemented without delays.

The Commissioner-General also stressed the importance of public sensitisation and said the GRA will intensify education campaigns immediately after Parliament gives approval.

He said this is necessary to ensure that taxpayers understand the new rules, especially the changes to invoicing, compliance timelines, and the responsibilities of VAT-registered businesses, while he assured industry players that the GRA will maintain open dialogue throughout the rollout period, promising prompt responses to concerns that may arise once the reforms take effect.

“Our goal is to make the transition as seamless as possible for both businesses and consumers,” he added.

The VAT reforms are part of Ghana’s broader strategy to modernize the tax system, improve revenue mobilization, and support economic recovery. While there are concerns, the government is committed to making the transition as seamless as possible for businesses and consumers.

However, questions remain about the impact on SMEs and the economy. Will the VAT reforms cripple SMEs, or will they provide a much-needed boost to Ghana’s economic growth? The answer lies in the government’s ability to balance revenue mobilization with business-friendly policies.

As the debate continues, stakeholders are urging the government to consider the potential consequences and ensure a fair and equitable tax system. The success of the VAT reforms hinges on effective implementation and ongoing dialogue with businesses and traders.

By Adnan Adams Mohammed

November 23, 2025
Traders and Bankers clash over lending rate …as GUTA advocates for Women’s Bank in earnest

Ghanaian traders have clashed with bankers and other financial institutions on their lending rates which they have described as abnormally high.

The Ghana Union of Traders’ Associations (GUTA) has over the years complained bitterly about commercial banks over what it describes as hidden and inconsistent lending rates that continue to cripple businesses.

The Association expressed alarm that the real cost of borrowing in Ghana remains far higher than the figures the banks and their regulators often publish, further urging the Bank of Ghana to act decisively to address what it describes as unfair risk pricing by commercial banks.

“Bank of Ghana has to come in and regulated again. When they talk about risk, you talk about the Ivory Coast having 7 percent, whereas Ghana’s is 21 percent. It is because they do proper due diligence,” Dr Joseph Obeng explained in a television discussion raising concerns about the widening gap between official lending rates and what traders actually face.

“He’s saying that the policy rate averages around 19 to 20 per cent. I’m going to hold him to that. I’ll do this research from the traders and bring this report because most of them say it’s around 25 per cent even at this time,” he said.

“If you say it’s 19, then the person out there might think their bank is taking advantage of them. Let’s publish these things so we can use them as a reference to bargain; otherwise, this thing is killing traders.”

Call for Women’s Bank

Dr Obeng has therefore called for the immediate establishment of the Women’s Bank promised by the government, warning that many small women-led businesses are collapsing under unbearable borrowing costs.

“Most of our women’s businesses are collapsing, always saddled in debt because the rate of borrowing at the microfinance level is so extensively high,” he said.

“By the turn of the year, they haven’t even paid half of the principal, and the debt is still accumulating. That’s why the Women’s Bank that the President has promised must be put in place, because our women folks are very important.”

He stressed that many women traders operate outside the mainstream banking system. “Most of them do not deal with the banks. They deal with susu people and microfinance, and it’s very worrying,” he added.

Consequently, the Minister of Finance, Dr Cassiel Ato Forson, during the presentation of the the 2026 budget announced that the much-anticipated Women’s Development Bank will be officially established early next year, aiming to enhance access to affordable financing for women entrepreneurs and small businesses across Ghana.

GUTA blames banks for poor risk management

Dr. Obeng accused some banks of poor risk management and internal corruption, saying they often push the cost of their inefficiencies onto responsible borrowers.

“When they talk about risk, you talk about the Ivory Coast having 7% whereas Ghana’s is 21%. It is because they do proper due diligence,” he argued.

“Sometimes the corruption in the banks itself, when they do not do the necessary due diligence and corrupt themselves by even going for some non-existing collateral… they put all these things together and then spread it across the good and bad borrowers, which is very bad.”

He insisted the Bank of Ghana must step in to enforce stricter oversight on how banks determine lending spreads.

“At least, if you think that we can do good for us, then let’s publish and let’s know,” he said. “Because if I’m doing well, then you don’t spread your risk and then put it apart for all of us to pay. That’s what the banks do.

“And the Bank of Ghana has to do something seriously about this, because it shouldn’t be said that inflation has come this low, and so the interest rate is high.”

But commercial banks blame lending crisis on deep structural failures

Meanwhile, Chief Executive of the Ghana Association of Banks, John Awuah, says the challenges in Ghana’s lending system reflect the character of the country and deep structural deficiencies that extend far beyond the banks themselves, thereby rejecting the claim that the issue was simply about due diligence or corruption within banks.

He said Ghana’s high lending rates reflect deep structural weaknesses in the economy.

“Half of the banks operating in Ghana are also operating in Côte d’Ivoire,” he said. “The same bank that lends cheaper there faces structural bottlenecks here — from the Lands Commission to the court system to credit culture.”

Mr Awuah added that Ghana’s banking system lacks a comprehensive credit tracking mechanism. “If Mr Obeng approaches a bank to borrow GH¢100,000, all the bank could do is ask where else he has exposure. It’s word of mouth,” he explained.

“There is no mechanism for a 360 view of the customer. So the bank gives GH¢100,000 thinking it’s for goods, but part goes to pay suppliers, rent, or arrears. By the time you realise, what you funded is gone. Where is he going to get the money to pay you back?”

By Adnan Adams

November 17, 2025
GUTA purges against import licensing or permit regime

Ghana union traders association

The Ghana Union of Traders Association (GUTA) has appealed to President Akufo-Addo not to assent to the Ghana Shippers Authority Act, 2024 until some critical issues raised on the Act by stakeholders are resolved.

GUTA in a statement raised the following issues:

1. The issue of registration of shippers and shipping service providers were not discussed with us to make our input as stakeholders in the shipping industry.

2. Submission of notice of shipment was also not discussed with stakeholders for their input.

3. The final draft was issued to stakeholders only after Parliament had approved the Bill.

4. Issues raised on the suspension of registration, renewal of certificate of registration, cancellation of registration and outright rejection, which are only related to permits and licenses to operate as importers have not been resolved with stakeholders.

5. The Advance Shipment Information System that had been resisted and withdrawn by the Government in the past is now being reintroduced in the Act. Our position on that has not changed. Moreover, this information sought by the GSA is of no relevance to their operation.

6. For these reasons, the Ghana Shippers Authority had agreed to our concerns and promised that as the Act has already been passed by Parliament, they would use Legislative Instruments (LIs) to correct any defect or anomaly in the operationalization of the Act. However, our consultations suggest that LIs cannot override an Act, hence our call on the President of the Republic not to assent to the Act until all issues raised are resolved.

August 27, 2024
GUTA wants govt to reduce cost of doing business

Ghana Union of Traders Association – GUTA

Adnan Adams Mohammed

The Ghana Union of Traders Association (GUTA) has accused the Minister of Trade and Industry, KT Hammond, for not doing enough to alleviate the challenges associated with the high cost of doing business in the country.

GUTA contends that instead of the minister taking proactive measures and implementing policies to reduce business costs at entry points like ports, he has rather resorted to making contentious remarks on the streets about traders.

GUTA indicated that the country is not in a price control regime, hence no instruction or direction is followed in the determination of prices of goods and services in the country. This comes on the back of recent complaints by Trades Minister, K.T Hammond about the prices of goods, particularly the price of cement in the country.

“We’re not in a price control regime; therefore, businesses do not take instructions or directions from any quarter in determining prices of goods and services,” the association noted in a statement issued, last week, signed by its President, Joseph Obeng.

GUTA emphatically stated that the business community does not take “delight in arbitrary increase in prices of goods and services, and that prices are actually determined by accumulation of cost of doing business in the country, which members of the business community have been complaining bitterly all these years”.

It noted that the “surest way to reduce and stabilise prices of goods and services is for the policy makers to prune cost of doing business in the country, in terms of the duty we pay, fees and charges, including shipping line charges, transportation cost, the increasing utility tariff regime” among others.

It added that this was the more reason, the minister should have met with “the cement producers to find out the cost of the increase in their prices”.

Also, Clement Boateng, the Vice President of GUTA, criticised the minister for a lack of vision in facilitating a decrease in the overall cost of doing business in the country.

He urged the minister to step out of his office and personally acquaint himself with the cost of duties paid by importers at entry points.

Mr Boateng emphasised that the exorbitant duty fees at Ghana’s ports necessitate traders passing on the costs to the end consumers.

Mr Boateng disputed the perception that Ghanaian traders are intentionally increasing prices, pointing out that duty costs in neighboring Togo are 1 per cent, and it is 2 per cent in Ivory Coast, whereas Ghana’s duty rate stands at 5 per cent.

He questioned whose actions were contributing to the elevated prices of commodities in the country.

Furthermore, Mr Boateng highlighted that GUTA had submitted suggestions to the government during the 2024 budget presentation, advocating for a reduction in the costs associated with doing business in Ghana.

However, he lamented that none of these proposals were incorporated into the final budget statement presented by the Finance Minister to Parliament.

Mr Boateng raised the question of accountability, asking who should be held responsible for the persistently high costs in the country.

January 17, 2024
Traders caution gov’t over drop in inflation

Inflation

Adnan Adams Mohammed

The Ghana Union Traders Association (GUTA) has cautioned the government against complacency despite the recent decline in inflation.

Traders, who are hardly hit with inflation surges as it erodes working capital, have called for continued vigilance and proactive measures, although, acknowledging the positive progress of inflation from 54.1% in December 2022 to 26.4% in November 2023.

The call comes at the time the Finance Minister, Ken Ofori-Atta, is celebrating the collaboration between the Treasury and the Bank of Ghana which has led to the halving of inflation from a peak of 54.1% to 26.4%.

“We should not be complacent, especially when the second tranche of the IMF loan hasn’t come in. If it comes within time, we can sustain the gains we have gotten so far. We must be serious in managing our monetary business to maintain the current inflation rate,” the President of GUTA, Dr. Joseph Obeng, said in an interview last week.

“The inflation was at 54.1%, the exchange rate was very high. In the last quarter of 2022, we experienced large rates of depreciation. When the first tranche of the IMF loan of $600 million came, we experienced long-term stability of the cedi. I think that is what is doing the magic of pulling the money down. Inflation has been at 54.1%, and it’s seeing a current decline of 26.4%. Once inflation is declining, we should be seeing the effects of that in the market. Are we seeing that?”

He anticipated a lower monetary policy rate to help cushion businesses.

“We should expect the monetary policy rate to come down, along with inflation so that the cost of borrowing and other costs of doing business can come down too. Then inflation can come down to the barest minimum to help both the consuming and the trading public.”

Finance Minister Ken Ofori-Atta recently attributed the consistent decline in inflation to the government’s dedicated efforts in restoring macroeconomic stability.

At the Bank of Ghana’s End-of-Year Cocktail last week, Mr. Ofori-Atta said: “Together, we have strived to reset our financial architecture”.

“And despite the challenges over the last three years, I am proud that we have ‘turned the corner’ toward a more robust and transformed economy”, he added.

Mr Ofori-Atta said: “Indeed, amidst these trials, our united front in managing the Bank of Ghana’s balance sheet has been nothing short of heroic.”

“More importantly, the Ghana Statistical Services (GSS) reported that inflation has slowed down to 26.4% in November 2023 from 35.2% in October 2023”, he pointed out, adding: “In effect, the Bank and the Treasury’s collaborative efforts have halved inflation (from 54.1% in December 2022) in under 12 months”.

Mr Ofori-Atta said while it is a welcome news that prices are no longer rising as quickly, “We know many people continue to face severe cost of living pressures. So, we must stay the course to continue to get inflation back down to single digits as quickly as possible”.

He noted: “We must never forget that our work is vital not just for the present but also for the future of Ghana. And, so, though our journey is far from over, and the road ahead will require continued perseverance and unity, I am confident that we will not only prevail but also propel Ghana towards a more prosperous future”.

Mr Ofori-Atta said 2024 should be a period in which “we must continue to push boundaries, work with equanimity, and dispel any cloud of nihilism to guarantee economic freedom and social mobility for all”.

Also, the President, Nana Akufo-Addo commended the Bank of Ghana for its role as a reliable custodian of the nation’s finances, an efficient currency manager, and a vital lender of last resort.

President Akufo-Addo highlighted the BoG’s pivotal role during the COVID-19 pandemic, citing the institution’s collaboration with commercial banks to institute a GHS3 billion credit and stimulus package. This initiative aimed to rejuvenate industries, particularly in the pharmaceutical, hospitality, and manufacturing sectors, yielding positive effects on the country’s economic growth.

Recalling the challenges faced upon assuming office in 2017, President Akufo-Addo acknowledged the distressed state of the banking industry. He praised the BoG’s intervention under new leadership, emphasising the restoration of stability and sanity to prevent the collapse of the financial sector. The President noted the successful cleanup exercise, which safeguarded the funds of 4.6 million depositors and utilised GHS21 billion from government funds.

In addressing the economic impact of the COVID-19 pandemic and the Russia-Ukraine conflict, President Akufo-Addo credited the BoG for playing a crucial role in restoring macroeconomic stability. He highlighted a significant drop in inflation from 54% in December 2022 to 26.4% in November 2023, as well as sustained stability in the exchange rate.

Underscoring the BoG’s support for the government’s economic diversification and transformation process, its partnership with the International Monetary Fund (IMF) and the implementation of corporate governance measures to prevent future bank failures, ensuring a robust banking sector.

While acknowledging the BoG’s contribution to the digitisation of the economy, emphasising the transformation of the payment system, and enhanced financial inclusion, the President called for stronger partnerships and enhanced policy coordination between the BoG and the Ministry of Finance to address current economic challenges and facilitate the desired economic transformation.

December 25, 2023
Businesses overwhelmed with taxes.. call out on gov’t to save jobs and investments

Adnan Adams Mohammed

Some Business owners in the country have since been on government to reconsider numerous taxes they pay right from source of their raw materials through import duties to production, packaging and selling their finished goods.

The business captains claim government is deliberately targeting them as the soft-spot for its revenue mobilisation because they are formalised.

Businesses owners have intensified their calls on government to either review or scrap some of the taxes.

After several attempts to get the government’s attention to scrap the COVID Health Recovery Levy from the list of taxes businesses pay, President Nana Akufo-Addo recently pleaded with Ghanaians to keep paying the Covid-19 levy despite the pandemic was declared over.

“The COVID Health Recovery Levy that was introduced to help fill some of the expenditure holes might not be the most popular tax, but I entreat all of you to bear with us”, the president pleaded.

However, the Ghana Union of Traders Association (GUTA) has said it is not opposed to government’s increasing its revenue rather they want the Covid-19 levy expunged.

The President of GUTA, Dr Joseph Obeng, explained that the association is not opposed to taxes including the e-levy, noting: “The e-levy, as it is structured now, is OK, and will help expand the tax net but the Covid levy is what needs to be taken out of the table to help lessen the burden of businesses.”

The GUTA president noted the Covid levy “is deemed as a nuisance tax now that the Covid era is over.”

The government imposed the covid levy on the supply of goods and services and imports to raise revenue to support Covid-19 expenditures and to provide for related matters.

Within eight months of coming into implementation, the levy accrued GH¢773.93 million, according to fiscal data released by the Ministry of Finance on 22 April 2022.It was 12.7 percent lower than the budget target of GH¢889.07 million. In 2021, expenditures on Covid-19 and related issues, totalled more than GH¢2.8 billion.

Additionally, the Association of Ghana Industries has called on government to reconsider its current calculation of Value Added Tax (VAT) on indigenous companies whose annual revenue exceed GHS 500,000 per annum to reduce the economic burden on local industries.

According to them, per the current calculations of 15 percent VAT and the summation of the COVID levy, GETFUND and NHIS levy amounting to 6% coupled with other cost of production were negatively impacting the growth of local industries.

The Greater Accra Chairman of AGI, Tsonam Akpeloo impressed on government to relook the development.

“The way the VAT is being calculated currently means that we are being charged double or we are paying VAT on VAT. This essentially means that government adds the levies i.e. NHIS, the Covid and GETFund which is totaling 6 percent to cost of the products before applying the VAT and the other levies again,” he said.

“In effect, one business, one transaction we have to pay double tax and this calculation is not helpful. Already Industries are struggling, there is no point in getting them to pay tax in this manner so we want government to reconsider its computation and reverse it to the time before 2017,” he appealed.

In November 2022, Government announced its decision to increase the Value Added Tax (VAT) by 2.5 percent.

This moved the tax policy from its previous percentage of 12.5% to 15%.

Adding his voice to the tax burden on businesses, the Chief Executive of AGI, Seth Twum Akwaboah, has called for a reduction in duties paid on raw materials used in printing and packaging in the manufacturing sector.

According to him, this is necessary to cushion local producers and contribute to exports and development.

“When you import raw materials to print, you pay duty on it but when you import the finished product, you do not pay duty on it and it makes the local printing more expensive than importation. So we think that this policy is not helping local producers and if we want to create jobs and grow the economy and reduce our dependency on imports and protect the local currency, these are some of the things we have to look at,” he said on the sidelines of the opening of Propak Exhibition and trade conference in Accra, last week.

Mr Twum Akwaboah called on government to review some outdated trade policies to give a boost to local producers within the printing, packaging and labeling space.

The Association explains that with the growing presence of industrial revolution in the country, local producers have built their competences to meet the demand of clients and society.

“The Florence Convention which was a convention signed in the 1850s because at the time we didn’t have sophisticated printing presses in Ghana. So to encourage one to bring in the learning materials, the duties were taken off: at that time it made a lot of sense but unfortunately this law has stayed with us up till today. While we have moved on in terms of capacity to print,” he noted.

“We also have some sophisticated printing firms in Ghana now and duty of imports of raw materials continues to persist so we believe that kind of policies is not helping local producers and it should be looked at,” he added.

Consequently, some investors within Ghana’s automotive industry are asking government to explore various options in addressing the high taxes in the country, impacting on their business.

This, they say is affecting their cost of operations in the importation of components for assembling vehicles in the country.

According to Chief Operations Officer of Rana Motors, Kassem Odaymat, the prospects for the automotive industry are positive, but more work needs to be done to attract investors.

“The automotive business as a whole, any tax introduces affects us in a way because our business model is not just assembling of cars but we do other things like tyres, car batteries and other components”, he said in an interview last week.

“I won’t say there are too many gaps but we have some that need to be relooked at. The economy now is not favourable, but we hope things will be fine”, he said.

Mr Odaymat, however, maintained that the automotive industry in Ghana has a positive outlook and as a result, it should be attractive enough to bring in more investors.

Government in 2019 said it will offer tax breaks of up to 10 years to automakers that set up local manufacturing plants, as it seeks to attract international companies such as Volkswagen AG and Nissan Motor and co.

Ghana’s move at the time was to lure carmakers from some African countries which had attracted seven manufacturers including Renault, Nissan and Toyota with tax incentives.

June 17, 2023