By Christabel DANSO ABEAM
The Food and Beverages Association of Ghana (FABAG) has called on the Ministry of Finance to scrap the excise tax on fruit juices and sweetened beverages in the upcoming budget, indicating that its continued imposition threatens the survival of local manufacturers.
According to John Awuni, Chairman – FABAG, the excise tax Introduced in 2022 under the Excise Duty (Amendments) Acts 2023 (Act 1093), has led to a more than 50 percent decline in sales, significantly disrupted working capital, and forced some manufacturers to scale down operations. He also indicated that the local industry has been severely crippled since its introduction.
“If these taxes are not removed, more businesses could shut down, leading to a significant job loss and the reduction of tax contributions from the sector,” he noted.
He highlighted that the local manufacturers are already faced with multiple levies, including import duty, ECOWAS Levy, Exim Levy, value added tax, among other regulatory charges; which has led to forced labour retrenchment, high cost of products in the face of external market and the inability to compete with imported products of similar type and content.
FABAG believes that the immediate removal of the excise tax will ease the current burden on the domestic beverage manufacturing industry and encourage growth and development in that sector with benefits such as increased revenue for government through high sales volume, increased employment and, consequently, high Pay As You Earn (PAYE) and Social Security and National Trust (SSNIT) payments, increased payment of withholding taxes, corporate income tax, value added tax and related taxes.
The association is, therefore, urging government to consider the long-term impact of the tax on local manufacturing and take urgent steps to reverse it in the 2025 budget.
