[ 2021-03-19 ]

Newly proposed taxes a huge hindrance to businesses’ recovery
The Association of Ghana Industries (AGI) is
alarmed at the government’s newly proposed taxes
as outlined in the 2021 Budget Statement and
Economic Policy.

It fears these taxes introduced will have a huge
toll on the business community particularly at a
time when players are reeling from the devastating
effects of the COVID-19 pandemic.

Speaking at Citi TV/UPSA’s post-budget analysis
programme at the University of Professional
Studies, Accra (UPSA) held on Thursday, the
AGI’s representative on the panel, Adobea
Asiama-Aboagye, said it will be prudent if
government reconsiders the imposition of the taxes
to help in the sustainability of business
operations.

“Around this time, businesses need to be
cushioned to revamp and recover from the pandemic.
The banking sector levy of five percent on pre-tax
on profit. We don’t expect the banks to absorb
this. The likelihood of it being transferred to
industries, businesses and individuals is very
much on the high side. So we think that should be
looked at again. So we think that should be looked
at again”, she said.

The government, through the caretaker Minister for
Finance, Osei Kyei-Mensah-Bonsu in delivering the
2021 budget last week announced the government’s
proposal of introducing six new taxes.

These taxes include a COVID-19 Health Levy; 1%
increase in National Health Insurance Levy and 1%
increase in flat VAT rate as well as a 30 pesewas
increase in fuel prices to take care of excess
power capacity charges [20 pesewas] and Sanitation
and Pollution Levy [10%].

But Madam Asiama-Aboagye was of the view that,
existing economic conditions amidst the taxes will
only aggravate the difficulties on the production
and manufacturing value chains businesses and to a
larger extent even livelihoods.

She strongly pointed out that the taxes, if not
reviewed, will even make businesses unable to take
advantage of the Africa Continental Free Trade
Agreement (AfCFTA).

“Aside from that, as businesses when it comes to
VAT and NHIL, there is a big problem. If you look
at this, increasing these two levies is
significant for businesses. If we are having taxes
coming up in this format then how are we
positioning ourselves to take advantage of AfCFTA?
These are some of the challenges because if it
comes to manufacturing, the cascading effects of
taxes in the distribution chain is a major
problem.”

Source - Citinewsroom

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