Federation of Labour petitions Parliament over proposed Excise Tax Bill
LOCAL manufacturers have raised concerns over the government's decision to introduce a new bill to impose a 20 per cent excise duty on locally produced fruit drinks and bottled water.
As a result, the Ghana Federation of Labour (GFL) last Tuesday led the manufacturers to petition Parliament to stay the passage of the bill, pending exhaustive consultation with stakeholders.
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According to the GFL, passing such a bill at a time local companies were already riddled by a harsh economic environment would further increase their operational cost and stifle the growth of local businesses.
The petition, which was signed by the President and the General Secretary of the GFL, Caleb Nartey and Abraham Koomson, respectively, was presented to the Speaker of Parliament, Alban Sumana Bagbin.
It was also copied to the leadership of Parliament, as well as the chairmen of the Finance and the Trade committees of the House.
Grievances
In the petition, a copy of which was made available to the Daily Graphic, the GFL said the Excise Duty Amendment Bill, 2022 sought to amend the Excise Duty Act 2014 (Act 878) to revise the excise tax rates for some products, including all sweetened drinks and processed fruit juice which hitherto did not attract excise duty.
"The GFL, constituted by 14 trade unions, vehemently opposes the Excise Duty Amendment Bill, 2022 in its current state, as it will further hike the operational costs of local manufacturing businesses.
"We cannot sit on the fence and watch our members reel under the ever-mounting taxation on the local manufacturing industry.
“Companies have drastically reduced staff numbers and we cannot wait for many more fold-ups," it said.
It also said the introduction of the new tax regime was inimical to the growth of the economy, as it undermined job creation and denied the state of the required revenue.
It added that the survival of the local industry was already threatened by the increased cost of production and the dwindling purchasing power of consumers.
"Just last week, the Bank of Ghana, in its determination to fight inflation, increased its policy rate to 28 per cent, and this obviously means a higher cost of borrowing.
“Value added tax (VAT) has gone up by 2.5 per cent, alongside the BoG's recent policy rate, thereby suffocating manufacturing companies in the country," it said.
High utility tariffs
The GFL further said contrary to the expectations of organised labour that the government would roll out "well-crafted policies" to protect local Industries, it had rather "slapped an astronomical 30 per cent increment in electricity tariffs and about 50 per on water on industry, effective February 1, 2023".
While acknowledging the fact that there was every reason to appreciate the government’s determination to raise revenue to meet its statutory obligations, it said in the face of the prevailing economic crisis, when there was uncertainty about investment in bonds ahead of an agreement on the domestic debt exchange programme (DDEP), the introduction of such a tax was not going to be healthy for the manufacturing sector.
It added that local manufacturers were already battling high fuel prices and an unstable cedi-dollar exchange rate and could not, therefore, accommodate further taxes.
Background
The GFL is one of the umbrella bodies for workers in the country.
The federation is composed of trade groupings, such as the Textile, Garment and Leather Employees Union (TGLEU), the Food and Allied Workers Union (FAWU), the General Manufacturing and Metal Workers Union (GEMM), the National Union of TEAMSTERS and General Workers (NUTEG), the Union of Educational, Agricultural and General Workers (UNEAGES) and the Bogoso Gold Enterprise Based Union (BGEBU).
Others are the ICT and General Services Employees Union (ICT-GSEU), the Financial, Business and Services Employees Union (FBSEU), the National Union of Agricultural Development Bank (NUadb), the Chirano Gold Mines Senior Staff Union (CSSU), the Senior Staff Association of the Judicial Service of Ghana (SSAJUG) and the Amalgamated Labour Reform Union (A’LU)