General Agriculture Workers Union (GAWU), has warned that the rural agriculture sector risks losing substantial investment if government does not withdraw the 12.5 percent corporate tax placed on it.

In a statement released by the union, it lamented the fact government had abandoned its goal of attracting long-term investments into rural agriculture, by implementing tax policies that offer tax exemptions to businesses that invest in agriculture outside regional capitals.

GAWU noted that the erstwhile policy succeeded in attracting “sizable investments into rural agriculture and offered relatively decent employment to many people including young women and men, who otherwise would have migrated into congested urban Ghana in search of elusive white-collar jobs.”

‘Consequences can be catastrophic for rural employment’

The union has expressed disappointment in the fact that government has decided to end the policy and instead instituted a “hefty” 12.5 percent corporate tax on plantations and agro-processing companies located in rural Ghana.

The union in their statement asserted that, “the policy shift from a zero-related taxation to 12.5 percent tax, is inappropriate and bound to have adverse impacts on rural agriculture and livelihoods… there are already strong indications that businesses with massive investment in rural agriculture and agro-processing are re-thinking their investment models. And the thinking is in the direction of disinvestment. The consequences can be catastrophic for rural employment and livelihoods.”

Taxes will worsen rural-urban migration

Speaking on Eyewitness News, the General Secretary of GAWU, Kingsley Ofei-Nkansah, also linked the effect of the taxes on rural farming to the workers who he said will be “extremely depressed.”

According to him, the challenges brought on by the taxes could also lead to more young people leaving the rural areas for urban centers in search of employment.

“So if you strain them, the situation can only get worst and when it gets worst, more people will drift to the urban centers in search of opportunities that do not exist… It is going to be a strain, it is going to discourage people from going into agriculture,” he stated.