Industry appeals to Parliament against passage of 20% excise tax

Ghana Federation of Labour (GFL) has appealed to Parliament not to approve 20 per cent excise tax on sweetened fruit drinks and water as that will be inimical to growth of the economy.

Apart from undermining job creation and denying the State of required revenue, the passage of the proposed tax would go a long way to worsen growth and development in the private sector and Ghana as a whole.

“The private sector is overburdened and yet to recover from the ravages of COVID-19 and global economic decline. We rather recommend to the government to broaden the tax base and net and ensure that a large chunk of people not covered by VAT and corporate tax are drawn into the net.”

A statement signed by Mr Abraham Koomson, Secretary General on behalf of organised labour and copied to the Ghana News Agency in Accra said the survival of the local industry was already threatened by the increased cost of production and the dwindling purchasing power of consumers.

It said if the taxes are imposed, most Industry players would be compelled to relocate to neighbouring countries that were offering better and enabling environments for business to flourish.

Debate on draft of the Excise Duty Amendment Bill, 2022 is expected to be debated in Parliament from Wednesday, March 23, 2023.

According to the framers, it seeks to amend Excise Duty Act 2014 (Act 878) to revise the Excise tax rates for a number of products including all sweetened drinks and processed fruit juice which hitherto did not attract Excise duty.

Already, Value Added Tax had gone up by 2.5% alongside the BOG recent Policy thereby suffocating Manufacturing companies in the Country.

“While Organised Labour is expecting well-crafted policies to protect Local Industries, Government has rather slapped an astronomical 30% increment in Electricity tariffs and about 50% on water for Industry effective 1st February 2023.

“There is every reason to appreciate Government’s determination to raise revenue to meet its statutory obligations, however, at this stage of the economic crisis facing the Country, and when there is uncertainty about investments in bonds ahead of an agreement on the Domestic Debt Exchange Programme, the introduction of such tax is not going to be healthy for the Manufacturing Industries.

“The Ghana Federation of Labour constituted by 14 Trade Unions including the under listed Organisations vehemently oppose the Excise Duty Amendment Bill, 2022 in its current state”

The 14 Unions are textile, Garment and Leather Employees Union (TGLEU), Food and Allied Workers Union (FAWU), General Manufacturing and Metal Workers Union (GEMM), National Union of TEAMSTERS and General Workers (NUTEG), Union of Education, Agricultural and General Workers (UNEAGES), Bogoso Gold Enterprise Based Union (BGEBU) and ICT & General Services Employees Union (ICT-GSEU).

The rest are Financial, Business and Services Employees Union (FBSEU), National Union of Agricultural Development Bank (NUadb) Senior Staff, Chirano Gold Mines Senior Staff Union (CSSU), Senior Staff Association of Judicial Service of Ghana (SSAJUG) and Amalgamated Labour Reform Union (A’LU).

“We cannot afford to sit on the fence and watch our members reel under the ever mounting TAXATIONS on local Manufacturing Industry. Companies have drastically reduced staff and we cannot wait for many more fold-ups. We make a passionate appeal to you and rely on your high office to consider the plight of workers and act to save the precarious situation since there weren’t broader consultations with stakeholders prior to the presentation of the Bill to Parliament”.