Accra, April 4, GNA – The Association of Ghana Industries says the government risks missing out on its revenue target on the back of the new taxes passed by Parliament.
In a statement the AGI said the passage of the Excise Duty, Growth and Sustainability Levy and Income Amendment Bills would have negative impact on businesses.
The AGI said that businesses might have no other option than to cut down on expenditure and production levels to stay within budget amid unfavourable tax regime.
“Contrary to Government’s ambitious revenue projection which largely hinges on the performance of Industry, we foresee a contraction in manufacturing and other related business activities,” it said.
It denounced the lack of stakeholder consultation that characterised the formulation and passage of the three revenue bills.
“AGI took steps to make input to the bills and it’s obvious that our submissions did not receive the consideration we expected,” the statement read.
It called on Government to engage the AGI on measures to incentivise local industries to forestall the negative consequences of these policies.
The business climate, it observed, continued to experience a tax regime that did not motivate local production and formal business operations.
“Indeed, local industries are already under severe pressure from several headwinds, including; inflation currently at 52 per cent, VAT shot up to 15 per cent, resultant effect of 21.9 per cent, Water tariff increments at about 172 per cent for the beverage sector, Electricity tariff currently at 29.9 per cent for industry, and Policy rate at 29.5 per cent, making cost of credit exorbitant.
“How could our beverage sector absorb water tariff increment of over 300% in a single tariff review and now excise duties slapped on locally produced beverages,” the statement said.
It recommended a path of fiscal prudence for government to ensure sustainable growth for the economy.
“We appreciate the urgent need of the IMF measures, but this should not be at the expense of growth in our industrial sector.
“Indeed, it is in the mutual interest of industry and Government to sustain Agriculture and Industrial sectors which hold the key to job creation,” it said.
It has also welcomed any opportunity to dialogue with Government on how to save jobs and the strategic options to explore in cushioning local industries.
GNA