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The Association of Ghanaian Industries (AGI) has complained about what it perceives to be multiplicity of taxes in the economy.

It referred to the introduction of the 17.5 per cent tax on petroleum products imposed in the latter part of last year which it claimed was hurting businesses.

The government’s proposed tax measures for implementation this year, including the Special Petroleum Tax of 17.5 per cent as part of a rationalisation of the VAT regime and change in the petroleum pricing structure.

The Association of Ghanaian Industries (AGI) has complained about what it perceives to be multiplicity of taxes in the economy.

It referred to the introduction of the 17.5 per cent tax on petroleum products imposed in the latter part of last year which it claimed was hurting businesses.
The government’s proposed tax measures for implementation this year, including the Special Petroleum Tax of 17.5 per cent as part of a rationalisation of the VAT regime and change in the petroleum pricing structure.

This policy comes with a mitigation account to manage extremely low and high prices that result in sporadic price increases or decreases under the automatic adjustment formula, which comprises the reversal of excise tax on petroleum from Ad Valorem to specific extension of the National Fiscal Stabilisation Levy of five per cent and special import levy of one to two per cent to 2017 and increase the withholding tax on directors’ remuneration from 10 per cent to 20 per cent.

Others are the administrative improvement project being done by the Domestic Tax Revenue Division and the new computerisation by the Ghana Revenue Authority (GRA) known as Total Revenue Integrated Processing System (TRIPS).

The President of the AGI, Mr James Asare-Adjei, in an interview said there were a number of businesses that relied on generator for power to run their businesses and as a result, the taxes imposed was aggravating the challenges of businesses.

“Let us also understand that there are some key taxes that do not go to help make us competitive. We are not an island, we need to compete in the sub region on the continent and globally,” he said on the sidelines of the GRAPHIC BUSINESS / Fidelity Bank Breakfast forum in Accra on July 2.

Mr Asare-Adjei said making business operations in Ghana more expensive would make local businesses less competitive outside the shores of the country.

“We don’t have the capacity to move to the export market that is why we are not able to generate the needed revenue”, he said and added that “The economy must be export driven. We cannot really be able to achieve that much if the cost of doing business in the country keep on rising and we do not seem competitive in the export market,” he said.

He called on the government to address these issues in order not to confine businesses but propel them to grow.

GIPC

The Chief Executive Officer of the Ghana Investment Promotion Centre (GIPC), Mrs Mawuena Trebah, said clearly focusing and improving the quality and investment in the entire value chain was more important.

For instance, in the agriculture sector, she said, it was more important to be known not only as a country with the world’s best cocoa but the best chocolate.
“We already recognise that there is a gap in investment across the entire value chain, it is our responsibility to support the business community to look again at the specific opportunity to invest in,” she said.

She said the Strategic Targeted Investment Promotion had led to a double and an increase in investment in the manufacturing sector between 2013 and 2014.
“At the end of 2013 it was US$509.89 million and 2014 US$1.377 million.

That clearly shows that a targeted strategic approach to inviting investments into our country would support that endeavour. That also means that we must build a critical mass of companies seeking to reduce import to the country, thus, our relationship with various business groups, including the AGI becomes very important,” she said.

Stimulus package

Meanwhile, the AGI has reiterated its appeal to the government to establish a GH¢1 billion stimulus package as a short-term measure to save industries from total collapse.

It has warned that Ghana risked losing its industrial base if the government policies do not quickly address challenges confronting them.

The AGI believes this would give industries some reliefs.

He argued that during the financial crisis, even capitalist states, such as the United States of America (USA), came up with stimulus packages to save its industries from total collapse.

Mr Asare Adjei explained that industry has been battling with numerous challenges, but the unprecedented depreciation of the cedi last year and the extended load shedding to industrial enclaves broke the camel’s back, resulting in the massive layoffs.