Taxes choke cement manufacturers  – Chamber

Rev. Dr. George Dawson-Ahmoah

The Chamber of Cement manufacturers (COCMAG) has decried the increasing number of taxes and levies imposed by government on various materials and processes used by its members in the production of cement for the Ghanaian market.

At a crunch board meeting held by the Chamber on 27th June 2019, members discussed various challenges confronting the cement industry.

Most recent among them is the imposition of a recent fumigation levy of US$0.50 per tonne on imported clinker by the Ministry of Health (MoH)

Executive Secretary of the Chamber, Rev. Dr. Dawson-Ahmoah, described the situation as shocking, stressing that: “How on earth can a raw material such as clinker be fumigated before clearance from the port? We are calling for the immediate abolishment of this levy.

“My members are not happy at all, because besides this levy there’s still the VAT restructuring levy of 5% and the 2% special tax which have been in existence for the past 3 years. There are several others, including a proposed increase in certification licence /surveillance from Ghana Standards Authority etc. All these affect production-cost in the production of cement, culminating in uncompetitiveness,” he said.

Rev. Dr. Dawson-Ahmoah further lamented a recent reduction of benchmark value by the Vice President for all imports into the country. Strangely, the Customs Division of the Ghana Revenue Authority (GRA) restricts such directives to cover the importation of raw material from only China and Turkey.

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“There have been persistent appeals to the Customs Division of the Ghana Revenue Authority (GRA) that cement raw materials are imported from all over the world, but these appeals have not been addressed. Meanwhile, the reduction in benchmark values are strictly adhered to on finished imported cement products (Bagged and Bulk) that are competing with the local cement manufacturers, which is a clear case of unfair trade practices,” he pointed out.

Another issue raised by members, he disclosed, was the increasing amount cement factories in Ghana. “Already, the existing manufacturers have a combined utilisation rate of about 45%, an indication that there’s total adequate cement capacity in Ghana.

“To date, there are nine (9) individual cement manufacturing factories plus one bagging plant that has a total installed capacity of about 11.6 million tonnes per annum. The average consumption is about 6.3 million tonnes per annum, bringing a surplus of about 5.3 million per annum. “So, why do we need more cement factories?” asked Dr. Dawson-Ahmoah.

Commenting on the recent press-release by the Public Utilities and Regulatory commission (PURC) on the proposed increase of electricity tariff – which is to take effect on 1stJuly 2019, Rev. Dr. Dawson-Ahmoah said: “This is a bombshell; the stated increase of 11% as announced is about 46% comparing with the previous tariff,’’ he bemoaned.

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He therefore cautioned that such a development if not addressed might force companies to downsize; as such, government should step in to protect and empower the existing producers so as to promote the industry. He was however grateful to the Honorable Minister of Trade and Industry for his support, and trusts that these issues will be addressed with his intervention.

The current members of the Chamber of Cement manufacturers are CIMAF Ghana Limited, Diamond Cement Group, CBI Ghana Limited and Ghacem Limited. Wan Heng Ghana Limited and Xin Ann Safe Cement Limited, bot Chinese companies, are yet to regularise their membership.

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