The business community has appealed to government to suspend all new taxes planned for implementation in the wake of a worsening economic situation.
The Ghana Union of Traders Association (GUTA), Food and Beverages Association of Ghana (FABAG) and Sachet Water Producers Association, Importers’ and Exporters’ Association, among others, said excessive taxes are stifling business and, therefore, businesses cannot continue to pay for the inefficiencies of the managers of the economy.
The business community explained that businesses are currently under serious pressure from a 22% policy rate, cedi depreciation against the US dollar at over 18% since January 2015, a 17.5% special levy on petroleum products, over 30% bank lending rates, 9% fuel price increase and inflation currently at 16.8%
The business community made the appeal at a meeting with officials from the Ghana Revenue Authority (GRA) and Ministry of Finance and Economic Planning (MoFEP) on the planned implementation of Excise Tax Stamp.
As a start, the stamp will be fixed on alcoholic, non-alcoholic beverages including carbonated water.
Mr John Awuni, who delivered a communiqué on behalf of the business community, appealed to government to postpone the proposed implementation of the excise tax stamp scheduled to begin on June 2, this year.
He explained that although the tax is meant to step up government revenue and to curb the importation and smuggling of cheaper goods to unfairly compete with indigenous industries, the timing was financially improper.
Mr Awuni said energy challenges, coupled with exchange rate fluctuations, had compelled businesses to downsize their working staff.
The tax stamp bill, which was passed into law on November 29, 2013, would, among other things, affix tax stamps on excisable products imported or manufactured for consumption in Ghana.
The use of tax stamps and banderoles on selected excisable products is also expected to reduce the smuggling and influx of counterfeit products on the Ghanaian market.
Mr Awuni, who is also the Corporate Affairs Director of Finatrade Group of Companies, added that the recent increment in the prices of petroleum products and utility tariffs, coupled with its attendant high inflation rates, could subsequently cripple businesses.
He said fees from regulatory agencies such as Food and Drugs Authority and the Ghana Standards Authority, were also stifling businesses, and that the suspension of the tax stamp would provide some respite to businesses to triumph.
"The high cost of doing business in Ghana has caused a significant reduction in demand for goods and services in the Ghanaian market," Mr Awuni added.
During the sensitisation programme, the business community noted that if the tax stamps are free, then it can be implemented.
However, once businesses are to buy them, it will be additional cost, which businesses will pass on to consumers.
Some also raised concerns about pays for the loading and offloading of cargo from containers in the process of fixing the tax stamps.
Others fear the tax stamps would push small- and medium-scale importers out of business.
The businesses noted that if the fixing of tax stamps takes long hours, it would result in demurrage at the expense of the importer while those to fix the stamps would also add additional human resource cost.
Samuel Akwasi Yenkyira from GRA explained that in 2013 Parliament approved a contract between the Government of Ghana and Authentix, USA, for the procurement of tax stamp systems.
He said the procurement of the tax stamp systems is expected to provide solution through the use of the tax stamp with detection gadgets and database administration systems for monitoring, tracking and reconciliation.
According to him, the purpose of the agreement is to actualise the implementation of the provisions in the Excise Tax Stamp Act 2013.
It seeks to engage the services of, and expertise of, Authentix International in the implementation of the tax stamp system in the country.
Under the agreement, Authentix would be responsible for the installation of a system web-based portal, an appropriate stamp affixing machinery, where necessary, on production lines of manufacturers, an operational and production testing, a testing validation and acceptance of machinery and system and the training of officers in the use of monitoring and detection devices.
The supplier of the fiscal tax stamp is expected to also have adequate stock levels of stamps at all times and provide customer support and maintenance throughout the duration of the project.
Mr Yenkyira said large importers can procure the stamps for their manufacturers to fix on the products before importation.
He explained that a company would also set up in the port to fix the stamps for medium- and small-scale importers.
According to him, others can also send the goods to warehouses where they can fix the stamps themselves.
Mr Yenkyira noted that a task force would arrest retailers of products without the tax stamps and trace it to the manufacturers, and sanctions, including fines and jail terms, would apply.
Source: The Finder
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