Tema-Ghana, April 19, CDA Consult – Mr. Sampson Awingobit Asaki, Executive Secretary of the Import and Exporters Association of Ghana (IEAG), has emphasized the importance of the government taking into account the business community’s opinion when implementing the three new levies.
The taxes comprise the Excise Duty Amendment Bill 2022, the Growth and Sustainability Levy Bill 2022, the Ghana Income Authority Bill 2022, and the Income Tax Amendment Bill 2022, which are estimated to generate around 4 billion Ghana Cedis in annual income as part of domestic revenue mobilization.
Mr. Asaki stated at the Ghana New Agency Industrial News Hub Dialogue platform, “I believe in recent memory this is the first time in the country where a Finance Minister has introduced a tax and all stakeholders and unions are kicking against it, which must be an indication to the government that the implementation of the tax was unacceptable.”
He stated that the constant imposition of taxes in the business sector would not only cripple the sector but would also prevent the government from reaching its objectives in terms of the quantity of taxes it expected to receive.
He continued by stating that the majority of companies would be compelled to close their doors as a result of continually operating at a loss, which would raise the unemployment rate. The government would then look unsatisfactory and be obliged to create an environment that is conducive to businesses thriving in the nation.
He expressed concern that the application of the taxes would trickle down to the poor, worsening their condition because prices of commodities in various markets were already high, and he advocated for the reinstatement of obsolete taxes.
“This government has come to make the poor the poorest and the rich the richest, because it is the rich man who goes and buys real estate, so if you really need that $4 million that these three bills will give them, they should reintroduce the aviation fuel taxes, real estate taxes, and luxury vehicle taxes,” he stated.
Mr. Asaki stated that the government should have taken the time in 2022 to understand the business situation and how most enterprises lost money, resulting in the ultimate closure of some institutions and organizations, and he advocated for more engagement on tax implementation.
During the discussion, Mr. Abraham Koomson, Secretary General of the Ghana Federation of Labour (GFL), stated that the imposition of new taxes is a threat to national economic progress.
He added that these enterprises employed people paid their salaries and social security, and helped to raise Ghanaians’ living conditions.
He stated that the government should not force factories to leave the country because some of these enterprises had already begun to decrease their workforce and others were planning to close down soon.
Mr. Koomson emphasized that eliminating these businesses would result in no money for development and would raise the country’s unemployment rate.
He warned that foreign countries investing in the country should not be discouraged if indigenous firms are not revitalized for the sake of the country’s future.
“Donkeys carry goods, but what have you accomplished if you overload the donkey and it breaks down?” he questioned.
Furthermore, the GFL Secretary General remarked that the government must assess the impact of the Excise Duty Bill 2022 on the manufacturing business.
He reiterated that the bill’s introduction will kill industries and worsen the unemployment rate in the country.
“The GFL continues to receive calls from Chief Executive Officers of companies and other stakeholders raising concerns that new laws were rushed and passed without proper consultation to weigh the implications on industry and, by extension, the fate of workers whose job security is guaranteed if industries break even,” he stated.
Mr. Koomson added that these products, along with numerous others on the market, were already difficult to obtain due to the high cost of unit pricing induced by a combination of variables, including the recent increase in water and electricity bills.
He went on to warn that increased import costs for raw commodities, as well as the Ghana Cedi’s depreciation, were all draining capital by the day.
He added that the difficult circumstances had resulted in corporations decreasing worker remuneration, breaking even to keep operations running, and postponing the new 20% tax to promote investor interest, secure continued money inflows, and create more jobs rather than kill them.
