Don’t approve 20% tax on fruit drinks, water - GFL appeals to parliament

The Ghana Federation of Labour (GFL) has appealed to Parliament not to approve 20 per cent excise tax on sweetened fruit drinks and water as that will be inimical to growth of the economy.

Apart from undermining job creation and denying the State of required revenue, the passage of the proposed tax, it said, would go a long way to worsen growth and development in the private sector and Ghana as a whole.

“The private sector is overburdened and yet to recover from the ravages of COVID-19 and global economic decline.

“We would rather recommend to the government to broaden the tax base and net and ensure that a large chunk of people not covered by Value Added Tax (VAT) and corporate tax are drawn into the net,” a statement signed in Accra by Abraham Koomson, Secretary General of GFL stated.

The survival of the local industry, it said, was already threatened by the increased cost of production and the dwindling purchasing power of consumers.

It said if the taxes were imposed, most industry players would be compelled to relocate to neighbouring countries that were offering better and enabling environments for business to flourish.

“While Organised Labour is expecting well-crafted policies to protect Local Industries, the government has slapped an astronomical 30 per cent increment in Electricity tariffs and about 50 per cent on water for Industry effective February 1, 2023.

There is every reason to appreciate government’s determination to raise revenue to meet its statutory obligations, however, at this stage of the economic crisis facing the country, and when there is uncertainty about investments in bonds ahead of an agreement on the Domestic Debt Exchange Programme, the introduction of such tax is not going to be healthy for the Manufacturing Industries,” the statement noted.

It said the Federation could not afford to sit on the fence and watch its members reel under the ever mounting taxations of the local Manufacturing Industry saying, that Companies have drastically reduced staff and there was the threat for more fold-ups.

“We make a passionate appeal to you and rely on your high office to consider the plight of workers and act to save the precarious situation since there weren’t broader consultations with stakeholders prior to the presentation of the Bill to Parliament,” the statement added.

Debate on draft of the Excise Duty Amendment Bill, 2022 commenced yesterday in Parliament.