Executive Member of the Association of Ghana Industries (AGI) Tsonam Akpeloo has told the government to review some of the areas it is spending revenue.
He said times are hard therefore the government must review its expenditure to reflect the realities.
Speaking on the Ghana Tonight show on TV3 Wednesday, April 5 in connection with the three revenue bills – Excise Duty, Growth and Sustainability Levy, and Income Amendment Bills – that have been approved by Parliament, he said “Our view is that government must look at its own expenditure and reduce its expenditure to reflect the realities of the time.
More Read
“Times are hard and you cannot afford to have a bloated expenditure this time. We feel very strongly that government should consider reviewing its own expenditure.”
The association said the approval on Friday, March 31 came on the heels of an already harsh business climate.
The passage of these bills poses very dire consequences for Industry.
“We continue to experience a tax regime that does not motivate local production and formal business operations.
“We denounce the lack of stakeholder consultation on such fiscal policies, which have a negative impact on businesses. AGI took steps to make input to the bills and it’s
obvious that our submissions did not receive the consideration we expected,” a statement issued by the AGI said.
The association further stated that local industries are already under severe pressure from several headwinds, including; Inflation currently at 52%, VAT shot up to 15%, the resultant effect of 21.9%, Water tariff increments at about 172% for the beverage sector, Electricity tariff currently at 29.9% for industry, Policy rate at 29.5%, making the cost of credit exorbitant, Increase in Residual Fuel Oil (RFO) price due to Government subsidy withdrawal, An unstable foreign exchange regime, Levies and taxes on imported raw materials totaling about 50%.
Electricity tariffs shot up significantly on two occasions totaling a whopping 56.5%, within
a period of fewer than six months. How could our beverage sector absorb a water tariff
increment of over 300% in a single tariff review and now excise duties slapped on locally
produced beverages?
“Contrary to the Government’s ambitious revenue projection which largely hinges on the
performance of Industry, we foresee a contraction in manufacturing and other related
business activities. Businesses may have no option but to cut down on expenditure and production levels to stay within budget. With the foregoing, Government risks missing its revenue target if the industry has to contend with these new taxes. While we reckon that Government needs revenue, fiscal prudence is crucial. We appreciate the urgent need for 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 hold the key to job creation.
“We call on Government to engage AGI on measures to incentivize our local industries to
forestall the negative consequences of these policies. To this end, we welcome the
opportunity to dialogue with Government on how to save jobs and the strategic options to
explore in cushioning our local industries. AGI wishes to assure its members that the Association will continue to engage Government on such fiscal policies to bring positive reviews in subsequent national budget statements.”
Source:3news.com
