Suspend excise tax bill for consultation "GFL appeals to Parliament"
The Ghana Federation of Labour (GFL) has called on Parliament to prioritise the plight of Ghanaian workers in the private sector by setting aside the Excise Tax (Amendment) Bill, 2022 before the House for broader consultation with stakeholders.
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The bill seeks to slap a 20 per cent excise tax on locally produced mineral water and beverages and, a further five per cent special levy on profit before tax on all companies to be known as growth and stability levy.
However, the GFL said imposing a 20 per cent excise tax on some products, including sweetened beverages, needed an urgent review given that local manufacturers were already grappling with at least 17 different taxes.
At a media briefing held in Accra last Tuesday, the General Secretary of the GFL, Abraham Koomson, said passing the bill in its current form, without proper consultation with key stakeholders, would be counterproductive as it had the potential to collapse local businesses.
He said local manufacturers were riddled with a multiplicity of taxes "so putting more load on the donkey will make it collapse, no matter how strong it is".
Outrageous tax
Describing the excise tax bill as outrageous, Mr Koomson said the imposition of 20 per cent of the ex-factory price on sweetened beverages and an increase in the already existing 17.5 per cent on non-alcoholic beverages to 20 per cent as proposed, would ultimately be passed on to the consumers "whose dwindling purchasing power could lead to a decline in sales".
"The GFL continues to receive calls from Chief Executive Officers (CEOs) of companies and other stakeholders raising concerns about what they see as the rush to pass the bill 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.
“These products, among several others on the market, are already barely affordable because of the high cost of unit prices triggered by a combination of factors, including water and electricity tariffs, which saw an upward adjustment at the beginning of this month, high import bills for raw materials and the depreciation of the cedi, which are squeezing out capital by the day, just to mention a few," he said.
Hardships
Making reference to Ghana’s unemployment rate, which stood at 13.9 per cent as of 2022, according to the Ghana Statistical Service, Mr Koomson said the situation would worsen if manufacturers were compelled to lay off more workers because of killer taxes.
He said although the GFL appreciated the government's effort to raise revenue, policy measures “must not kill the soul of the nation, the very people it seeks to protect”.
"We are, therefore, strongly appealing to the Minister of Finance, Ken Ofori-Atta, Parliament, through the Speaker and the Leadership, to consider the proposals on their desks and also raised by interested parties, including the Association of Ghana Industries (AGI), Food and Beverages Association of Ghana (FABAG) for the suspension of the new 20 per cent excise tax to boost investor interest, guarantee sustained revenue inflows and to create more jobs rather than killing them," he said.
Background
The GFL, the AGI and other groups recently petitioned Parliament to stay the passage of the excise tax bill for more consultation to be done.
The GFL and AGI had argued that the increment of the policy rate to 28 per cent by the Bank of Ghana, 2.5 per cent increment of the Value Added Tax (VAT), 30 per cent increment in electricity tariffs and about 50 per cent on water on industry, effective February 1, 2023, combined to increase the cost of doing business in the country.