New taxes pose very dire consequences for local industries – AGI bemoans

The Association of Ghana Industries (AGI) says it is disappointed in parliament’s decision to pass through three revenue bills amid the current economic challenges in the country.

On Friday March 31, the House passed the Excise Duty, Growth and Sustainability Levy and Income Amendment Bills after government tabled the revenue bills for consideration.

Although government believes that the bills could generate about GH¢4 billion in revenue when implemented, the AGI on its part has berated the decision.

In a statement issued by the AGI president, Seth Twum-Akwaboah noted that the implementation of the revenue bills will pose very dire consequences for industry and businesses operating in the country.

“We continue to experience a tax regime that does not motivate local production and formal business operations. We denounce the lack of stakeholder consultation on such fiscal policies, which have negative impact on businesses. AGI took steps to make input to the bills and it’s obvious that our submissions did not receive the consideration we expected.”

“Electricity tariffs shot up significantly on two occasions totalling a whopping 56.5%, within a period of less than six months. How could our beverage sector absorb water tariff increment of over 300% in a single tariff review and now excise duties slapped on locally produced beverages.

Contrary to Government’s ambitious revenue projection which largely hinges on the performance of Industry, we foresee a contraction in manufacturing and other related business activities,” the AGI added.

The AGI further noted that local industries operating have already been under intense financial and operational pressure which could force them to lay off workers with the implementation of the new taxes.

“Businesses may have no option than to cut down on expenditure and production levels to stay within budget. With the foregoing, Government risks missing its revenue target if industry has to contend with these new taxes. While we reckon that Government needs revenue, fiscal prudence is crucial. We appreciate the urgent need of the IMF measures, but this should not be at the expense of growth in our industrial sector,” the Association stated.

The AGI however called on government to hold engagements on measures to incentivise local industries to forestall the negative consequences of these tax policies.

Watch the latest edition of BizTech and Biz Headlines below: