GTMO appeals for reduction on tax on timber products
The Ghana Timber Millers Organisation (GTMO) has appealed to the Ministry of Trade and Industry to take steps to reduce the tax imposed on timber products to between three to five per cent.
The appeal is in reaction to a law passed by Parliament last month under a certificate of urgency to slap a 10 per cent tax/levy on invoice price of lumber products.
A statement issued in Kumasi on Wednesday and signed by Mr Fosuaba A. Mensah Banahene, Executive Secretary of the Organisation, said the law was passed without taking cognisance of the existing plethora of taxes and levies exporters of timber products have to pay.
It said there are six different taxes, levies and charges that they pay in addition to corporate tax.
"For all we know, timber companies are operating at profit levels around 10 per cent and a new tax of 10 per cent may indeed wipe away the entire profit level of a company".
The statement said the new law poses danger to the industry and could lead to lower returns in foreign earnings.
"Ghana stands on the threshold of losing its business to competitors like Cote D'Ivoire and Cameroon where timber operators do not have to pay extra taxes and are, therefore, able to quote lower prices in the same traditional markets that Ghana operates.
"If the tax/levy is implemented as it is now, we can be sure of a severe black lash on the economy, especially in the areas of foreign earnings and employment in the sector".
The statement said to address the problem of forest depletion in Ghana, the pivotal strategy should be on controlling farming activities that account for over 80 per cent of the destruction while the timber industry is responsible for 11-13 per cent.
It said the protection of the forest requires an inter-sectoral approach and called for the establishment of Forest Guard Corps, which is well trained and equipped and with its national command located outside the Forest Service Division.
The statement noted that there has emerged an agitation for preferential treatment for indigenous Ghanaian timber businessmen and women and this is steadily growing into an adversarial force that may lead to unpleasant consequences.
The GTMO, therefore, called for a special meeting to be convened, where all interested parties could have the opportunity to adopt a workable and satisfactory solution to the problem.