Accra, July 27, GNA – The Association of
Ghana Industries (AGI) is calling for an excise tax waiver on bottled water in
the midyear budget review as it would help make companies in the sector more
competitive and productive.
The Association said the high excise regime
on bottled water, a basic necessity in the country, is a major challenge
because Ghana’s excise rate of 17.5 per cent on bottled water was significantly
higher than the ECOWAS recommended limit of 10 per cent for non-alcoholic beverages
which exempts water.
A statement signed by Dr Yaw Adu Gyamfi, the
President of AGI, and copied to the Ghana News Agency, said many countries in
the sub-region did not levy excise on bottled water, and this makes Ghana an
outlier with such a high rate of 17.5 per cent.
The statement said: “Examples of countries
that do not levy excise tax on bottled water include Benin, Burkina Faso, Côte
d’Ivoire, Mali, Niger, Nigeria, Senegal, Guinea Bissau and Togo and we
therefore propose a waiver of this excise tax on bottled water”.
It said while the Association did not expect
any new taxes in the forthcoming midyear budget review, the Association expects
a revision of some of the existing tax policies.
The Association commended the government for
the passage of the Fiscal Responsibility Act to ensure prudent expenditure by
Government and urged the authorities to strictly adhere to the tenets of the
Act to maintain macro-economic stability in both the short and long terms.
On benchmark values, the Association said
the wholesale reduction of benchmark values for all imports was problematic,
noting that a number of key concerns are still being raised by Ghanaian
industrialists.
The statement questioned what will become of
local manufacturing with the influx of finished imports attracting 50 per cent
reduction in benchmark value, adding that some of the imported items to the
country already enjoy significant export rebates from their countries of
origin, thereby discouraging local investment in the affected sectors.
It said the situation is further worsened if
importers of finished goods are not registered and captured under the Valued
Added Tax (VAT) scheme as is largely the case and end up selling their products
in the market without charging front end VAT/NHIL/GETFund.
The Association urged government to quickly
review the luxury vehicle levy imposed on vehicles with high engine capacity of
2950cc and more because the definition for luxury vehicle was a misnomer that
increases cost of doing business in the country.
It said there are a number of companies,
which have fleets of such vehicles, not luxury, registered in the company name
and used mainly for distribution of their products/brands, yet being affected
by the policy adding that “classifying such vehicle as luxury is misleading and
must be either scrapped or reviewed”.
The Association urged government to as a
matter of urgency help develop local production capacity through incentivising
industry especially with coming into force of the African Continental Free Trade
Area (AfCFTA) agreement.
The statement said imported products, which
compete with products for which Ghana has competitive advantage and local
production capacity should not be duty free adding that it would position
Ghanaian industries to fully leverage the opportunities of the agreement,
otherwise the country could be marginalised.
The Association welcomed the quarterly
exchange rate fixing regime introduced by the government even though it appears
to be a short-term measure adding that “AGI will like to see measures that will
help change the structure of our economy towards export market development to
reduce the persistent pressure on the cedi”.
On the cost of electricity, the Association
said the high cost of electricity continues to be a major concern for
businesses regardless of the 25 per cent reduction in tariffs last year as the
cost of electricity has remained high for industry whereas peers in
neighbouring countries enjoy lower tariffs.
It said: “Reversing the practice where
industry subsidizes residential consumers will further drive down the cost of
electricity to industry and measures must be taken to reverse this trend.
GNA
