20 percent tax on food and beverages is suicidal - Association

Accra, Feb. 18, GNA - Government's 20 percent tax on food and beverages is suicidal because it could encourage smuggling, Mr Nabil Moukarzel, Chairman of Food and Beverage Association of Ghana on Wednesday observed. He said the situation was particularly disturbing when neighbouring Cote d'Ivoire had only imposed 13 per cent tax on food and beverages as compared Ghana's rate.

"The government of Ghana has imposed 20 percent duty tax, 15 percent value added tax and two percent ECOWAS and other taxes amounting to 37 percent thereby stretching importers to their elastic limits in the country."

Mr Moukarzel, who was explaining to the Ghana News Agency (GNA) the cause of sharp rise in prices of foodstuff such as rice, canned foods and oil, noted that if the taxes were to deter people from importing those commodities then it was misplaced, since Ghana was not yet ready to be self-sufficient in those products.

"There is the need to encourage domestic production, but there is also the need to ensure that the domestic industries are flourishing enough to feed its people before imposing such heavy taxes." Mr Moukarzel said the current 20 percent would also reduce government revenue as importers were likely to cut down import of those products into the country.

"Already there had been a sharp decrease in the importation of those products in our two major ports in Tema and Takoradi and if the trend continues for the next few months, conditions could be worse." The Chairman appealed to government to grant a concession to legal business in the country since such businesses had the potential of generating regular income for the country. "For now there is no way the country can avoid the importation of food and beverages, since we have not got the capacity of producing enough to feed ourselves and export the rest," he said. 18 Feb. 10