Reduce tax burden - AGI, ICU cry
The Industrial and Commercial Workers Union (ICU) and the Association of Ghana Industries (AGI) have intensified calls on the government to reduce the tax burden on their members.
According to them, the multiplicity of taxes continues to negatively affect the quality of lives of workers and impact business operations.
General Secretary of the ICU, Solomon Kotei told Business Finder in an interview “the myriad of taxes that the Ghanaian worker is paying without the commensurate benefit is suffocating us; in fact, there is too much pressure on workers.”
According to him, “even overtime is taxed; everything you buy on the market has got the VAT on it and we are paying the National Insurance Levy on almost every item on the market; when your money goes to the bank there are SMS charges which are deducted, all of which make life very unbearable for the Ghanaian worker.”
Mr. Kotei warned that the Union would continue to mount pressure on government and Parliament to withdraw some of the taxes while reducing others drastically.
He however described as unfortunate government’s decision not to yield to the demands of labour in its bid ostensibly to avoid distorting the national budget.
“For a government that tells labour, it is a dead goat so we can make all the noise and it still has its way it’s making the lives of workers in this country very tough,”
President of the AGI, James Asare Adjei has also indicated the Association’s dissatisfaction with the introduction of taxes without recourse to its members on the adverse impact on their businesses.
“This year, businesses were subjected to new taxes without any consultations; AGI and its members are not happy with the development and have therefore engaged the Ministry of Finance on this subject matter extensively,” he stressed.
The AGI has among other things expressed its displeasure over some tax obligations expected of its members.
Notable among them is the 17.5 per cent VAT, 3 per cent VAT Flat rate as well as some port charges.
Businesses have also complained about the fact that not only have the development increased their cost of operations, the high tax regime has also made them less competitive compared to their peers across the region and around the globe.
The Association’s Business Barometer (BB) surveys for all the three-quarters of this year had amongst the topmost challenges the multiplicity of taxes.
“Businesses continue to be under pressure from High cost of utility, Access to credit, and multiplicity of taxes,” the third quarter BB said.
In a related development, the AGI has welcomed the withdrawal of port handling charges which were met with agitations from business concerns in the country.
Private sector players considered the charges as legal and waged a campaign for its removal.
Shipping lines at the country’s ports had twice defied the transport Ministry order for the charges to be withdrawn compelling President Mahama to add his voice to the issue.
Mr. Asare-Adjei called on the government to as a matter of urgency reconsider its, Trade Liberalization policies.
According to him, the nature of the policy is gradually turning Ghana into a heavily import dependent economy, a situation he says is very worrying to local industries.
“It is obvious that local industries are experiencing numerous challenges, to mention a few, access and cost of credit, high and unbearable electricity tariffs to industry, stiff competition to imported product,” he said.
“We have increasingly become an import dependent economy I believe we must reconsider our trade liberalization policies which seem to give unlimited access to all kinds of imports into our markets.
The challenges of globalization emanating from the keen competition from imported goods keep on eroding the competitiveness of local industries,” he added.
It would be recalled that the Finance Minister, Mr. Seth Terkper warned against popular calls for the scrapping of some new taxes introduced by the government, saying the country will lose about Ghc 1 billion if those taxes were scrapped.
Dispelling accusations that he is tax-happy, the Minister explained that the taxes being implemented by government were necessary to restructure the tax base to correspond with global business changes.
Nonetheless, he stated that government will remove some of the taxes gradually from 2017.
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