2024 BUDGET: Consolidate economic stability, reduce operating cost – businesses urge gov’t

Finance Minister Ken Ofori-Atta

The Association of Ghana Industries (AGI) and Ghana Union of Traders Association (GUTA) have jointly appealed for government to address concerns surrounding cost of doing business in the country, while consolidating ongoing gains under the International Monetary Fund’s (IMF) intervention.

A recent survey conducted by KPMG echoes these concerns, with businesses urgently requesting a comprehensive review of tax policies including the COVID-19 levy, petroleum levy, import duties and the Growth and Sustainability levy in the 2024 budget.

Ahead of the 2024 budget presentation, Seth Twum-Akwaboah, Chief Executive Officer-AGI, in an interview with B&FT expressed appreciation for the existing macroeconomic stability; particularly after the International Monetary Fund’s (IMF) intervention. However, he stressed the importance of consolidating this stability to foster subsequent economic growth.

Mr. Twum-Akwaboah highlighted the necessity of supporting the manufacturing sector, emphasising its crucial role in job creation.

“We would like to see in this budget the specific policies that government is implementing to support the manufacturing sector,” he stated – pointing out the significance of developing value chains connecting agriculture to manufacturing and urging clarity on government policies in this regard.

AGI’s input into the budget includes a call for a review of existing taxes, which are deemed counterproductive to the industrial sector.

Mr. Twum-Akwaboah specifically mentioned the straight levy part of VAT and need for industries to recover the VAT paid to government. Additionally, he advocated a reconsideration of taxes with sunset clauses, emphasising the importance of periodic reviews.

The association acknowledged the positive impact of zero-VAT introduced for textile companies, and urged an extension beyond the current year. Mr. Twum-Akwaboah also proposed a similar zero-VAT for sanitary pad producers and the removal of import duties on raw materials, while emphasising that such reliefs should be exclusive to locally-produced sanitary pads.

Mr. Twum-Akwaboah noted that the AGI has also been advocating for fairness in the tax treatment of printed materials. He outlined challenges faced by the printers’ group, particularly the duty on locally printed textbooks. Against this backdrop, he recommended a policy revision to ensure equity in the taxation of imported and locally produced textbooks.

The Ghana Union of Traders Association (GUTA) echoed similar sentiments – underscoring the need for government to reduce the overall cost of doing business. Dr. Joseph Obeng, President-GUTA, expressed concern over excessive taxation, high interest rates and inflation affecting businesses’ competitiveness.

“Government should do everything possible to tone down taxes, levies and charges,” Dr. Obeng urged.

He highlighted the adverse effects of excessive taxation on the country’s ability to prioritise import substitution and achieve self-sufficiency, while emphasising that Ghanaian businesses face challenges due to high taxes – making them less competitive in the regional market.

GUTA also called for more efficient methods of collecting Value Added Tax (VAT) and the removal of persistent taxes that have become burdensome. Dr. Obeng stressed the need for restructuring VAT and eliminating taxes perpetuated without providing fair benefits.

As government prepares for the upcoming budget, the business associations’ joint plea signals a shared concern for economic stability, reduced business costs and strategic policies to support key sectors. The success of these recommendations could pave the way for a more healthy business environment in Ghana.

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